“Interest is Payable Quarterly": FG Invites Nigerians to Invest in Savings Bonds at Just N1,000

• The federal government, via the Debt Management Office (DMO), has encouraged citizens to invest in FGN savings bonds
• These bonds offer quarterly interest payments and the assurance that the principal will be fully repaid at maturity
• The DMO emphasized that while interest is paid out every quarter, the principal amount is returned at the bond's maturity

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.

The Debt Management Office (DMO) has unveiled a new opportunity for subscription to two Federal Government of Nigeria (FGN) savings bonds, priced at N1,000 per unit.

The DMO disclosed this in a statement released on Monday, August 7, 2024, in Abuja.

These savings bonds are designed specifically for retail investors, ensuring a quarterly interest payout and full repayment of the principal upon maturity.

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The subscription period for these bonds will begin on August 12 and close on August 16.

The statement revealed that the first offering is a two-year FGN savings bond set to mature on August 21, 2026, with an annual interest rate of 17.373%.

According to the DMO, the second issuance is a three-year FGN savings bond that will mature on August 21, 2027, and carry an interest rate of 18.373% per annum.

The agency also stated that the settlement date is August 21, with coupon payment dates scheduled for November 21, February 21, May 21, and August 21.

The DMO said:

“They are offered at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.”

The DMO noted that interest payments are made quarterly, with the principal amount due on the maturity date.

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The agency also guaranteed that the FGN savings bonds are supported by the full faith and credit of the Federal Government of Nigeria and are secured by the country's general assets.

Additionally, the bonds are listed on the Nigerian Exchange Limited (NGX) and are recognized as liquid assets for banks when calculating their liquidity ratios.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had earlier stated that Nigeria is about to raise bonds by issuing a dollar-denominated security.

Nigeria’s dollar bond becomes worst-performing

Meanwhile, Legit.ng earlier reported that Nigeria's dollar bonds were among the worst-performing emerging-market assets, with its sovereign-risk premium rising to an eight-month high

Certain investors might be concerned about a comparable result in Nigeria, where the implementation of President Bola Tinubu's policies has caused suffering for the populace.

According to strategists Alexander Rozhetskin and Luis Costa of Citigroup Inc., political commotion and a difficult reform environment are affecting the pricing of Nigerian bonds.

Source: Legit.ng