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FG raises N4.2 billion from Nigerian savings bonds in April 2024 

FG raises N4.2 billion from Nigerian savings bonds in April 2024 

The latest Federal Government of Nigeria Savings Bonds (FGNSB) have seen a hearty reception among investors, with total allotments for the April 2024 issuance reaching approximately N4.2 billion.

The Debt Management Office (DMO) reported a significant turnout with hundreds of investors participating, underscoring a strong confidence in the stability and returns of government-backed securities. 

The amount raised in April is about 45% higher than what was raised in the previous month. In March 2024, the DMO raised about N2.9 billion worth of savings bonds at a rate of 15.097% and 16.097% for the two-year and three-year bonds respectively. 

Details of the April 2024 Issuance 

During the offer period from April 1 to April 5, 2024, two bonds were made available: the FGNSB April 2026 and the FGNSB April 2027, with maturity periods of two years and three years respectively. The bonds attracted substantial interest rates of 17.046% and 18.046% respectively, leading to a spirited bidding process. 

  • The FGNSB April 2026, with a shorter tenure, saw a total allotment of N1.23 billion, while its longer counterpart, the FGNSB April 2027, witnessed a more considerable allotment of N2.99 billion. 
  • The total number of successful subscriptions stood at 558 for the 2026 bond and 952 for the 2027 bond, highlighting a more pronounced investor preference for the latter. 
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The settlements of these bonds occurred on April 9, 2024, with both offerings scheduled to mature in April of their respective years, 2026 and 2027. 

Coupon payments for these bonds will be disbursed quarterly, enhancing their attractiveness as a steady income source for bondholders. 

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What this means for investors 

  • This successful bond issuance is a clear indicator of the healthy investor appetite for Nigerian sovereign debt, reflecting trust in the nation’s fiscal management and economic policies. 
  • Moreover, the high participation rates and significant allotments serve as a robust indicator of the market’s liquidity and investor confidence in the stability of Nigeria’s financial instruments. 
  • For individual and institutional investors, this development signifies a valuable opportunity to lock in attractive interest rates with government-backed security. 
  • Investing in FGNSB not only offers favourable returns but also provides a safe investment avenue, contributing to funding national development projects. 
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What You Should Know 

  • Nairametrics had earlier reported that the Federal Government, through the Debt Management Office (DMO), opened offers for the April 2024 Savings Bond, with rates reaching as high as 18.046% per annum. 
  • According to the announcement made by the DMO, the two-year FGN Savings Bond will be issued at 17.046% per annum, while the 3-year FGN Savings Bond will be issued at 18.046% per annum.  
  • They are issued by the DMO monthly, and the subscription is N1000 per unit, subject to a minimum subscription of N5,000, and subsequent multiples of N1,000, with a maximum subscription limit of N50,000,000. 

Nairametrics

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