DMO Allots N400.5m in Savings Bond Sales

• DMO Allots N400.5m in Savings Bond Sales

The Federal Government has allotted N400.5 million in its July 2019 and 2020 savings bond sales, the Debt Management Office (DMO) has said.

The allotment results were obtained from the DMO’s website yesterday.

About N160.7 million was allotted at 13.38 per cent, with 342 successful subscriptions to mature in July 2019.

DMO noted that N239.8 million was allotted at 14.38 per cent, with 437 successful subscriptions to mature in June 2020.

The savings bond was introduced in March. It is targeted at low income earners to encourage them to save and earn more income (interest) compared to their savings accounts with banks.

It is also expected to help finance the nation’s budget deficit.

The bonds are debt securities (liabilities) of the government backed by its “full faith and credit”.

Interests are to be paid at regular periods and principal repaid at maturity.

The bond has a tenure of between two and three years and a minimum size of investment of N5,000 and maximum of N50 million.

It is aimed at deepening national savings culture, diversifying funding sources for the government and providing opportunity to all citizens, irrespective of income level to contribute to national development.

It will also enable all citizens to participate in and benefit from the favourable returns available in the capital market.

The next offer will open on Aug. 7 and close on Aug. 11, the DMO said.

In another development, the DMO sold N105.96 billion worth of five, 10 and 20 year bonds, an amount less than the N135 billion it initially proposed to issue.

According to the auction results, it allotted N47.01 billion of the 10 year paper to mature in March 2027 at 16.25 per cent, while N55.05 billion worth of the 20 year bond to mature in April 2037 was sold at 16.25 per cent.

It sold N3.90 billion worth of the five-year paper to mature in July 2021 at 16.24 per cent, much lesser than the N35 billion initially offered by the DMO.