The Debt Management Office (DMO) has opened subscriptions for two Federal Government of Nigeria (FGN) savings bonds this February. The two-year bond, maturing on February 12, 2027, offers an interest rate of 17.799%, while the three-year bond, due February 12, 2028, comes with an 18.799% return.
The DMO, in a statement, stated that the bonds currently open are expected to close on February 7. The settlement date is set for February 12, 2025, with coupon settlement dates on May 12, August 12, November 12, and February 12.
According to the DMO, “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. Interest is payable quarterly while bullet repayment (principal sum) is on the maturity date” and these bonds are backed by the full faith and credit of the FG and charged upon the general assets of Nigeria
The DMO stated that the bonds qualify as securities for trustee investments under the Trustee Investment Act. They also meet the criteria for government securities under the Company Income Tax Act and Personal Income Tax Act, offering tax exemptions for pension funds and other investors. Additionally, the bonds are listed on the Nigerian Exchange Limited and count as liquid assets for banks’ liquidity ratio calculations.
On January 27, the DMO raised N669.94 billion from the January 2025 FGN bond auction. The amount was higher than the N450 billion original target by N219.94 billion.
Last year, the FG borrowed an estimated N5.84 trillion from the bond market amid a move to bridge its 2024 budget deficit. However, the figures represent a 0.17 per cent decline when compared to the N5.85 trillion borrowed in 2023 through the window. Total subscription to FG bonds was N7.09 trillion in 2024 despite a total offer of N5.72 trillion. This year, the country is hoping to borrow more to finance its estimated N13.08 trillion deficit.
