The Nigerian Exchange (NGX) now lists two additional tranches of the federal government’s monthly savings bond issuance, allowing bondholders and other investors to trade on the retail bonds.
A total of 1.74 million units of the Federal Government of Nigeria Savings Bonds (FGNSBs), with a par value of N1,000 per unit and a market capitalization of N1.74 billion, were listed by the government, according to regulatory filings at the NGX.
According to a breakdown, 1.325 million units of three-year bonds were listed at N1,000 par value, compared to 414,795 units of two-year savings bonds that were listed at N1,000 per unit.
The 65th tranche of the savings bond created in 2017 was the two FGNSB tranches that were released in November 2022.
The Debt Management Office (DMO), which oversees government’s debt issuances and management, had in November offered a two-year FGN Savings Bond due November 16, 2024 at a coupon of 12.492 per cent per annum. It also simultaneously offered a three-year FGN Savings Bond due November 16, 2025 at coupon of 13.492 per cent per annum.
The coupon payment dates for the savings bonds, which pay interest rate quarterly, are February 16th, May16th, August 16th and November 16th respectively.
The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilization of savings and investments. Minimum subscription to the FGNSB is usually N5, 000 while the bond pays coupon or interest rate on a quarterly basis.
Usually, the minimum subscription to the bonds, offered at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
GTI Securities Limited, one of the authorised distribution agents for the FGNSB, noted that the savings bonds help to deepen national savings culture while providing opportunity to all Nigerians irrespective of income level to contribute to and benefit from national development.
According to the stockbroking firm, FGNSB enables all Nigerians opportunity to participate in and benefit from the favourable returns available in the capital market.
GTI Securities noted that the savings bonds are acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.
The bonds are usually listed on the stock exchange for trading, thus providing liquidity for investors who want to exit before maturity.
Savings bonds are good for savings towards retirement, marriage, school fees and house projects among other targets while assuring on its safety as the bonds are backed by the full faith and credit of the Federal Government of Nigeria.
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