DMO unveils FGN bonds offer for December

The Federal Government has opened subscriptions for the December 2024 issuance of the FGN Savings Bonds through the Debt Management Office.

The FGN Savings Bonds initiative, designed to foster national investment, invites both individual and institutional investors to subscribe from December 2 to December 6, 2024.

The December 2024 FGN Savings Bond offers two options:

A two-year bond with an interest rate of 17.483%, maturing on December 11, 2026.

A three-year bond with an interest rate of 18.483%, maturing on December 11, 2027.

Each bond unit is priced at ₦1,000, with a minimum subscription of ₦5,000 and additional investments in multiples of ₦1,000, up to a maximum of ₦50 million.

The settlement date for successful subscriptions is December 11, 2024, with the first quarterly coupon payment scheduled for March 11, 2025. Subsequent payments will follow on June 11, September 11, and December 11 annually.

The 18.48% interest rate on the current FGN Savings Bonds marks a significant increase compared to the previous year.

In December 2023, the interest rate for a similar offering was 13.28%, reflecting a sharp rise of 5.20 percentage points over the past year.

The rise in FGN Savings Bond rates is attributed to the Central Bank of Nigeria’s series of interest rate hikes since February 2024.

In an effort to tackle inflation and stabilize the foreign exchange market, the CBN has made Nigerian bonds more attractive to foreign portfolio investors by offering higher yields.

Most recently, it raised the benchmark interest rate by 0.25%, from 27.25% to 27.50%, to address escalating inflation.

This decision, unanimously endorsed by the Monetary Policy Committee, extends the ongoing trend of interest rate hikes.

The higher rates are expected to boost the appeal of FGN Savings Bonds, attracting both local and international investors seeking stable returns in a high-yield market.