FG offers high interest savings bond for November 2022
- The Nigerian government through the Debt Management Office (DMO) is offering High Yield Savings Bonds
- A circular from DMO indicates that the savings bonds are in two tranches, the 2-year bond and the 3-year bond
- The DMO said the bonds would mature in 2023 and 2025, respectively, and be charged against Nigerian government assets.
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The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria, has announced the November 2022 Federal Government Savings Bond Subscription Offering.
According to a DMO circular, there are two series of issues, 2 and 3 year savings bonds, with interest rates of 12.492% and 13.492%.
Fixed subscriptions for as little as N1,000
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Reports indicate that interest rates rose from 11.382% to 12.382% in October for 2- and 3-year savings bonds.
Yields on savings bonds have steadily risen since the Central Bank of Nigeria (CBN) adopted an aggressive monetary policy to fight inflation.
The CBN had raised the interest rate by 400 basis points to 15.5%, which stood at a 17-year high in September 2022.
Rising rates have pushed up interest on savings, affecting FGN bonds currently on the market.
Between May and November 2022, the interest rate of the 2-year FGN savings bond fell from 7.934% to 12.492% per annum, while the 3-year bond fell from 8.934% to 13.492% in during the same period.
The circular indicates that the subscription opening date was November 7, 2022 and closes on November 11, 2022.
Top 5 Nigerian banks generate N740.9 billion in interest income between July and September 2022
Obligations due after 2-3 years
The settlement date is November 16, 2022 and the coupon payment dates are set for February 16, May 16, August 16 and November 16 next year.
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.
The breakdown shows that the 2-year savings bond will mature on November 15, 2024, at 12.492% per annum, and the 3-year FGN bond will mature on November 16, 2025, at 13.492% per annum.
A breakdown of the bonds shows that the 2-year FGN Savings Bond will mature on November 16, 2024, at 12.492% per annum, and the 3-year FGN Savings Bond will mature on November 16, 2025, at 13.492% per year.
The savings bond is backed by the full faith and credit of the Nigerian government and is drawn from the general assets of Nigeria.
CBN has spent 281 billion naira to print new banknotes as the last banknotes start circulating on December 15
Dangote set to borrow N112 billion from Nigerians to complete refinery project, 10-year repayment date
Legit.ng reported that Dangote Industries Limited has decided to borrow N112 billion from investors to complete its refinery project.
To complete the project, the company needs an additional $1.1 billion which will be partly funded by the new bond this year.
The remaining N112 billion is the N300 billion bond raised by DIL in July 2021.