FG’s retail savings bond with 13.0 % coupon opens

The bidding for the Federal Government’s two-year savings bond has opened.
The Federal Government of Nigeria’s Savings Bond (FGNSB) which is targeted at retail investors is carrying a coupon of 13.01 per cent.
Debt Management Office (DMO) is targeting the bonds at retails investors and is expected to help broaden the country’s funding base.
It will be available for purchase on a monthly basis and has a maximum subscription of N50 million.
According to DMO, the bond will pay interest quarterly with a bullet repayment for principal at maturity. The initial offer will close on March 17.
The Federal Government in its 2017 Appropriation Bill had proposed a budget deficit of N 2.36 trillion and the appropriation is currently being considered by the National Assembly.
Half of the deficit, according to the government, would be funded through domestic borrowings including the FGNSB.
It would be noted that outstanding local debt rose to N13.88 trillion last year from N8.83 trillion in 2015 and is set to increase further, as Nigeria’s economy grapples with recession induced by low oil prices.
The government has said it will raise N130 billion at its third domestic debt sale this year on March 15 and sell N1.13 trillion worth of treasury bills by the second quarter.