By Omobayo Azeez
The federal government has offered a two-year and three-years savings bonds for subscriptions by investors, including low income earners, in the country.
The Debt Management Office (DMO) said in a circular on Monday that the bonds were backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria.
According to the DMO, the closing date of the offer for subscription is Friday December 6, and is due for settlement on December 11, while the coupon payment dates of the bonds are March 11, June 11, September 11, and December 11, 2020.
The circular reads: “The bonds qualify as securities in which trustees can invest under the Trustee Investment Act, and qualifies as a government security within the meaning of Company Income Tax Act and Personal Income Tax Act, for tax exemption for pension funds, amongst other investors.”
The DMO explained that the two-year bonds would be due on December 11, 2021, while the three-year bonds would be due on December 11, 2022, at the annual rates of 9.091 per cent and 10.091 per cent respectively.
According to the statement, the unit of sale is N1,000, subject to a minimum subscription of N5,000, and in multiple of N1,000 thereafter, subject to a maximum subscription of N50m.
“Interested investors should contact the stockbroking firms appointed as distribution agents by the Debt Management Office, or visit the DMO website for the list of distribution agents,” the DMO said.
The concept of savings bond was introduced March 2017 to encourage savings habit among Nigerians especially the low income earners and so far, it has increased participations in the local bond market and boosted the country funding base.