FG issues N2b savings bonds in 2024’s maiden issuance

The Federal Government has raised about N2 billion from the maiden issuance of the monthly retail savings bonds as investors continued to show strong appetite for sovereign securities.

The January 2024 tranches of the monthly retail bond issuance, otherwise known as Federal Government of Nigeria Savings Bond (FGNSB), were the first debt issuances by the government in the year.

Allotment reports at the weekend indicated that the government raised about N1.998 billion in two-year and three-year bonds. A total of N603.42 million was raised under the two-year bond while N1.394 billion was raised under the three-year bond.

The latest issuances represented double-digit increases on the previous allotments in December 2023.

The allotment for two-year bonds represented an increase of 26.25 per cent on N477.98 million raised in December 2023 while the latest three-year bond issuance was an increase of 16.61 per cent on N1.196 billion recorded in previous month.

The Debt Management Office (DMO), which oversees government’s debt issuance and management, had offered the two tranches of FGNSBs of two-year and three-year tenors with coupons of 11.033 per cent and 12.033 per cent respectively. The January 2024 issuance is the 79th tranche of the savings bond, introduced in 2017.

The two-year and three-year sovereign retail bonds would mature on January 17, 2026 and January 17, 2027.

Minimum subscription to the pro-low savers bonds was N5,000 with maximum subscription per subscriber capped at N50 million. Application list for the bonds had closed on Friday January 12, 2024, with settlement date on January 17, 2024.

The FGNSBs are designed to have most of the features of the existing sovereign bond but with other benefits to the bondholder, including low amount of minimum subscription, listing on stock exchange and trading on the bonds.

It will also be backed by the full faith of the Federal Government of Nigeria and is therefore deemed risk-free.



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