The Federal Government of Nigeria (FGN) has commenced the auction of its July Savings Bond.
In a statement released to the public, the Debt Management Office (DMO), disclosed that it’s receiving the application for the bond sales. It commenced on Monday, July 1, 2019.
According to the DMO, the closing date for the bond sales has been scheduled for Friday, July 5, 2019.
The bonds: The DMO on behalf of the Federal Government, offered a two-year FGN Savings Bond at 11.195 per cent per annum and would be due on Saturday, July 10, 2021, while the three-year FGN Savings Bond was offered at 12.195 per cent per annum and would be due on Sunday, July 10, 2022.
How the bonds were offered: According to the DMO, the bonds were offered at 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 million.
What the bonds represent: The bonds, the DMO said, qualify as securities in which trustees can invest under the Trustee Investment Act. The debt office also revealed that the bonds qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption and pension funds, among other investors.
Interested in buying? The DMO advised interested investors to contact the stockbroking firms it appointed as distribution agents.
Nairametrics, however, understands that the stockbroking firms include Access Bank Plc, First Bank of Nigeria Limited, Standard Chartered Bank Nigeria Limited, Citi Bank Nigeria Limited, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Limited, FSDH Merchant Bank Limited, Zenith Bank Plc, Ecobank Nigeria Limited, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Limited, and Stanbic IBTC Bank Plc.
Understanding Bonds: A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and the borrower that includes the details of the loan and its payments. A bond has an end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments that will be made by the borrower.
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