Connect with us

Bonds

FG Opens Subscription for February Savings Bonds at 17.8% and 18.8% Interest

Published

on

Bonds- Investors King

The Federal Government through the Debt Management Office (DMO) has opened subscriptions for two Federal Government of Nigeria (FGN) savings bonds for February 2025, offering interest rates of 17.799% and 18.799%, respectively.

The latest issuance comes as part of the government’s ongoing efforts to attract domestic investors and bridge its fiscal gap.

In a statement released on Monday, the DMO confirmed that the first offer is a two-year savings bond maturing on February 12, 2027 with an annual interest rate of 17.799%.

The second offer is a three-year savings bond set to mature on February 12, 2028, at an 18.799% interest rate.

The subscription window for the bonds opened on February 3, 2025, and will close on February 7, 2025. The settlement date is set for February 12, 2025, with coupon payments scheduled quarterly on May 12, August 12, November 12, and February 12.

“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,” the DMO stated.

The FGN savings bonds are backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.

The DMO emphasised that these securities qualify as investments under the Trustee Investment Act and as government securities under the Company Income Tax Act and the Personal Income Tax Act, making them eligible for tax exemption for pension funds and other institutional investors.

“They qualify as securities in which trustees can invest under the Trustee Investment Act,” the DMO noted, adding that they also qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds, among other investors.

The latest bond issuance follows the government’s move to raise N669.94 billion through the January 2025 FGN bond auction, exceeding its initial N450 billion target by N219.94 billion.

Last year, the Federal Government borrowed an estimated N5.84 trillion from the FGN bond market to support its 2024 budget deficit.

However, this represents a slight 0.17% decline from the N5.85 trillion raised in 2023. Despite an initial total offer of N5.72 trillion, investor demand pushed total subscriptions for FGN bonds to N7.09 trillion in 2024.

With Nigeria facing a budget deficit of N13.08 trillion in 2025, the government is expected to increase its reliance on domestic debt markets to fund critical projects and economic programs.

The DMO has continued to emphasize the safety and liquidity of FGN securities, positioning them as a viable investment option amid rising interest rates and inflationary pressures.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Comments
Advertisement
Advertisement
Advertisement