FG opens July Savings Bond for trading on Nigerian Exchange

The Federal Government has listed its latest issuances under its Federal Government of Nigeria Savings Bond (FGNSB) on the Nigerian Exchange (NGX) Limited.

The listing of the two tranches of the FGNSB issued earlier this month paved the way for bondholders to trade on their holdings.

The government had offered a two-Year FGN Savings Bond due July 14, 2023 at a coupon of 8.35 per cent per annum. It also simultaneously offered a 3-Year FGN Savings Bond due July 14, 2024 at coupon of 9.35 per cent per annum. The July 2021 offer was the 49th tranche of the savings bond, introduced in 2017.

Application list for the two tranches of bonds for July 2021 had opened on July 5, 2021 and closed four days later. The settlement date for the issuance became effective on July 14, 2021.

Regulatory documents showed that the government raised about N962 million under the savings bonds in July, despite reduction in coupon rate.

A total of 341,012 units of the two-year bond valued at N341.01 million were listed at par value of N1,000 while a total of 620.986 million units of the three-year bond valued at N620.986 million were listed at par value of N1,000.

The coupon payment dates for the bonds, which pay interest rate quarterly are October 14, January 14, April 14 and July 14 respectively.

The coupons or interest rates on the July issues were below rates paid for the last month’s issues. The decline in rate in July offer represented the first drop in recent steep rise in sovereign savings bonds’ yields.

The government had in June 2021 offered its two-Year FGN Savings Bond due June 16, 2023 at a coupon of 8.889 per cent yearly. It also offered a three-Year FGN Savings Bond due June 16, 2024 at coupon of 9.889 per cent yearly.

Usually, the minimum subscription to the bonds, offered at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilisation of savings and investments. Minimum subscription to the FGNSB is usually N5,000 while the bond pays coupon or interest rate quarterly.