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DMO announces July 2021 FGN savings bond offer for subscription

According to the disclosure, the 2-year bond was offered at 8.35% per annum.

The Debt Management Office (DMO), on behalf of the Federal Government has announced the offer for subscription of the July 2021 FGN Savings Bond.

This is contained in a disclosure released by the agency on its website on Monday, 5th July 2021.

According to the disclosure, the 2-year bond was offered at 8.35% per annum as against the 7.753% offered in May 2021.

Also, the 3-year FGN savings bond was offered at 9.35%, an uptick compared to the 8.753% rate offered in the month of May, while the June 2021 FGN bond auction was oversubscribed despite the drop in interest rates.

The latest savings bond offer comes in two tranches:

  • 2-year FGN Savings Bond due July 14, 2021: 8.35% per annum.
  • 3-year FGN Savings Bond due July 14, 2024: 9.35% per annum.
  • Opening date – July 5, 2021
  • Closing date – July 9, 2021
  • Settlement date – July 14, 2021
  • Coupon payment dates – October 14, January 14, April 14, and July 14.
  • Units of sale –  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.

In case you missed it

Recall that Nairametrics had reported an oversubscription of over 178% from the N150 billion, which the DMO intended to raise in June 2021.

The oversubscription for the FGN Auction Bonds auctioned on June 23, 2021, were for the 16.2884% FGN MAR 2027 (Re-opening 10-Year Bond), 12.50% FGN MAR 2035 (Re-opening 15-Year Bond) and 12.98% FGN MAR 2050 (Re-opening 30-Year Bond). These bonds were all oversubscribed by 32%, 155%, and 348%, respectively.

What you should know

The FGN Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.

  • The bond qualifies as securities in which trustees can invest under the Trustee Investment Act and also qualifies as a liquid asset for liquidity ratio calculation for banks.
  • The bond also qualifies as government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.

Article originally published here.

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