The Debt Management Office (DMO), on behalf of Federal Government of Nigeria (FGN), has concluded plans to issue a new type of bond called the FGN Savings Bond (FGNSB). This will be the FGN’s third debt instrument after the FGN Bonds and FGN Treasury Bills.

Unlike the first two debt instruments, the FGNSB is targeted at retail investors and lower income earners to encourage savings and earn more income compared to their traditional savings accounts.

FGNSB is 100% safe as there is no default risk, it is backed up by the the ‘full faith and credit’ of the Federal Government. Interest will be paid every quarter and the principal repaid at maturity.

Benefits:

• It is 100% safe with guaranteed returns
• Incomes earned from the instrument are tax exempt
• It provides steady income and a more competitive interest rate
• The FGN Savings Bond Certificate can be used as collateral for loan
• Good for savings towards retirement, marriage, school fees, house projects, etc.
• It enables individuals enjoy those benefits which accrue to high net-worth investors in the capital market.

Features:

1. FGN Savings Bond (FGNSB) will be issued on March 13, 2017
2. Interested parties (individuals and small savers) have five working days to buy the bond via their stockbrokers with allotment notification sent a week after
3. The minimum investment will be N5,000 only (additional in multiples of N1,000) and maximum N50 million
4. The tenor will be two – three years. Subsequent issuances will be monthly with quarterly payment of interest to investors
5. FGNSBs can be traded through stockbroking firms just like stocks
6. All requests are to be submitted through designated distribution agents and ARM Securities have been appointed as a key agent.