FG raises N196.3 million from saving Bond in January – DMO

by | January 30, 2018 12:00 am



The Debt Management Office said it raised N196.3 million through the first auction of the Federal Government Savings Bond issued in the second week of January according to a report released on its website.
The DMO had sold the two year bond at 12.098 per cent as against 11.738 percent which it auctioned the two year bond in December last year. Likewise the coupon on the three year bond was higher at 13.098 percent from 12.738 percent in December 2017
The auction results released showed a decline in the level of subscription despite the higher rates when compared to the December 2017 auction
The results of the sales published on the DMO website , showed that N73.05 million was allotted at 12.09 per cent with 121 successful subscriptions to mature in Jan. 2020.
It stated that N123.25 million was allotted at 13.09 percent with 178 successful subscriptions to mature in Jan. 2021.
The savings bond issuance is expected to help finance the nation’s budget deficit.
The bond issuance is part of the Federal Government’s programme targeted at the lower income earners to encourage savings and also earn more income (interest), compared to their savings accounts with banks.
The bonds are debt securities (liabilities) of the Federal Government, backed by its ‘full faith and credit’ and Interests are to be paid on it at regular periods and principal repaid at maturity.
The bonds have a tenure of between two to three years and a minimum size of investment of N5, 000 and maximum of N50 million.
The bond is aimed at deepening national savings culture, diversifying funding sources for the government and providing opportunity to all citizens, irrespective of income level to contribute to national development.
It will also enable all citizens to participate and benefit from the favourable returns available in the capital market.
Last month, the DMO had raised N50.25 million through the Dec 2019 paper and N196.16 million through the Dec 2020 paper. The DMO had last week raised N215 billion from the first monthly auction of FGN bonds of the year which was oversubscribed.

 

MICHEAL ANI

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