DMO unveils FGN bonds offer for December
The Federal Government has started subscriptions for the FGN Savings Bonds issuance in December 2024 through the Debt Management Office.The FGN Savings Bonds project, which aims to promote national investment, encourages both private and institutional investors to enrol between December 2 and December 6, 2024.
The December 2024 FGN Savings Bond includes two options:
A two-year bond having an interest rate of 17.483% that matures on December 11, 2026.
A three-year bond with an interest rate of 18.483% that matures on December 11, 2027.
The bond unit costs ₦1,000, with a minimum subscription of ₦5,000 and further investments in multiples of ₦1,000, up to a maximum of ₦50 million.
The settlement date for successful subscriptions is December 11, 2024, with the first quarterly coupon payment slated for March 11, 2025. The subsequent installments will be sent on June 11, September 11, and December 11 of each year.
The current interest rate on FGN Savings Bonds is 18.48%, a considerable rise over the previous year.
In December 2023, the interest rate on an identical offering was 13.28%, representing a 5.20 percentage point increase over the previous year.
The increase in FGN Savings Bond rates is due to the Central Bank of Nigeria's sequence of interest rate hikes from February 2024.
In order to combat inflation and stabilise the foreign exchange market, the CBN has made Nigerian bonds more appealing to foreign portfolio investors by increasing yields.
Most recently, it hiked the benchmark interest rate by 0.25%, from 27.25% to 27.50%, to combat rising inflation.
This decision, unanimously approved by the Monetary Policy Committee, continues the current trend of interest rate increases.
The higher interest rates are likely to increase the appeal of FGN Savings Bonds, attracting both domestic and international investors seeking consistent returns in a high-yield market.
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