DMO lists N2.068bn FGN Savings Bond for retail investors on NSE

 
THE Debt Management Office (DMO) of Nigeria today made FGN Savings Bond available for retail investors on the floor of the Nigerian Stock Exchange (NSE) by listing N2.068 billion.
Speaking at the listing of Series 1 of the FGN Savings Bond at the Exchange, Director General of DMO, Dr. Abraham Nwakwo stated that minimum subscription pegged at N5,000 with additions in multiple of N1,000; subject to a maximum of N50 million.
The Savings Bond, the first of its kind in Nigeria, was opened to investing public by way of offer for subscription over a 5 day offer period starting from Monday, March 13, 2017 to March 17, 2017 and N2, 067, 961, 000 was raised from the retail market at 13.01 percent coupon.
According to him, over a year ago, the CEO of the NSE, Oscar Onyema mentioned to the DMO the possibility of introducing a retail bonds and we started work immediately with the team of the exchange, the Central Bank of Nigeria, the Securities and Exchange Commission and other agencies that are relevant.
He stated that, the DMO, on behalf of the Federal Government of Nigeria, has launched a new retail investment programme – the “Federal Government of Nigeria (FGN) Savings Bond” to help enhance the savings culture among Nigerians while providing all citizens irrespective of income level, an opportunity to contribute to National Development; as well as the comparatively favourable returns available in the capital market.
“FGN Savings Bond is safe and backed by the full faith and credit of the Federal Government of Nigeria, with quarterly coupon payments to bondholders”, Nwakwo said.
Nwakwo said fixed coupon will be paid quarterly to investors with the tenors which will range from two to three years.
“It will be issued on a monthly basis through an offer for subscription and monthly offer will be open for five days from the date of announcement”, said Nwakwo.
Benefits of FGN Savings Bond according to Nwakwo is that the coupon/interest income from the Savings Bond are tax-free; the bondholder enjoys coupon/interest on a quarterly basis which is paid directly to his/her bank account; it makes it possible for individuals to plan and save towards personal projects; FGN Savings Bonds are liquid as secondary market trading will be on the trading platform of the Nigerian Stock Exchange; the FGN Savings Bond is acceptable as collateral for loans and that it offers guaranteed returns, and encourages financial inclusion.
Commenting on the listing, Executive Director, Capital Markets, NSE, Haruna Jalo-Waziri said “we are pleased to list the series 1 of this innovative investment offering that caters to the retail segment of the Nigerian Capital Market. The off take of the first tranche underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the Capital Market whilst delivering value to investors at all income levels. We look forward to continue the collaboration with DMO to list subsequent series of the Savings Bond”.
The DG of the DMO was hosted to a closing gong ceremony to commemorate the listing. Thereafter, he met with stockbrokers to review activities on the series 1 savings bond and thank them for their support on the initiative.
The series 2 of the savings bond will be opened for subscription between April 3 and 7, 2017.