Nigeria’s Debt Management Office (DMO) has launched two new Federal Government of Nigeria Savings Bonds available for public investment at N1,000 per unit, representing the government’s latest funding initiative.
According to the DMO, investment options are now available to Nigerian investors seeking government-backed securities.
The initial bond offering features a two-year maturity term, scheduled to mature on June 11, 2027, providing investors with an annual return of 16.121 percent.
The alternative investment option spans three years, reaching maturity on June 11, 2028, and delivers a higher annual yield of 17.121 percent to compensate for the extended investment period.
“Offer opens on June 2 and closes on June 6; settlement date is June 11, while coupon payment dates are Sept. 11, Dec. 11, March 11, and June 11.
“They are offered at N1,000 per unit, with a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
“Interest is payable quarterly while bullet repayment (principal sum) is on maturity,” the DMO stated.
The debt office emphasized the securities’ reliability, noting their government guarantee and asset backing structure.
“They qualify as securities where trustees can invest under the Trustee Investment Act.
“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other investors.
“They are listed on the Nigerian Exchange Limited and qualify as liquid assets for liquidity ratio calculation for banks,” according to the statement.
These investment instruments represent a key component of the government’s borrowing strategy, issued through the DMO to facilitate federal financing needs.
The bonds specifically target individual and smaller-scale investors, offering a secure investment avenue with minimal risk exposure. Their reputation as Nigeria’s safest investment options stems from the extremely low probability of government default.
Investors benefit from guaranteed interest rates that ensure predictable income streams throughout the investment period. Unlike conventional FGN Bonds that typically require substantial initial investments, these savings bonds cater to retail market participants through reduced entry requirements.
The capital mobilized through these bond issuances supports government infrastructure development initiatives and helps address fiscal shortfalls in the national budget.
