DMO offers July 2022 FGN Savings bond for subscription, reduces interest rate

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The Debt Management Office (DMO), on behalf of the Federal Government has announced the offer for subscription of the July 2022 Federal Government Savings Bond to investors.

This disclosure is contained in a circular issued by the DMO and can be seen on its website noting that there are two-year and three-year savings bonds, with interest rates of 8.075 per cent and 9.075 per cent respectively.

A breakdown of the bonds shows that the two-year FGN savings bond will be due on July 13, 2024, at 8.075 per cent per annum and the three-year FGN Savings Bond which will be due on July 13, 2025, at 9.075 per cent per annum.

The subscription which opens July 4th, 2022 and to be close July 8th, 2022, while settlement date is July 13th, 2022  and Coupon Payment Dates is October 13th, January 13th, April 13th, and July 13th.

Unit 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 N50,000,000

A month-on-month comparison shows that the rates for the two tranches are lower compared to 8.205per cent and 9.205per cent offered for the two-year FGN savings bond due June 15, 2024, and three-year FGN Savings bond due June 15, 2025, respectively.

According to the disclosure, the security is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

The FGN Savings Bond qualifies as securities in which trustees can invest under the Trustee Investment Act.

It 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, among other investors.