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The Federal Government has allotted N256.23 million in its November 2019 and 2020 savings bond sales, according to the Debt Management Office (DMO).
The allotment results, obtained from its website showed that N72.42 million was allotted at 12.09 per cent with 177 successful subscriptions to mature in November 2019.
It stated that N183.81 million was allotted at 13.09 per cent with 244 successful subscriptions to mature in November 2020.
The fund generated from this instrument is expected to be used for financing development projects across the country.
The bond issuance is part of the programme targeted at the lower and middle income earners with subscriptions as low as N5,000 to encourage savings and also earn more income (interest) compared to their savings accounts with banks.
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.
The bonds are debt securities (liabilities) backed by the ‘full faith and credit of its issuer, the Federal Government.
Interests are to be paid 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.
It will also enable all citizens to participate in and benefit from the favourable returns available in the capital market
On a related development, the Federal Governemnt, at the conclusion of the November round of the monthly local bond sale, was able to raise about 87 per cent of its target sum, the DMO stated.
Recall that the debt office on last Wednesday re-opened a dual-tranche local currency paper worth N100 billion and, according to the auction result, it is quite similar to the last. The N50 billion five-year notes at 14.50 were undersubscribed at N23 billion, with N14.6 billion allotted.
The N50 billion 10-year bonds on the other hand were oversubscribed at N82.39 billion as investors once again showed preference for longer tenure instruments. A total of N73.17 billion was allotted at 16.2884 percent.
The government has already exceeded its target of raising N1.2 trillion for domestic financing of the budget. It has raised nearly N1.4 trillion from the monthly sales alone apart from the saving bonds.
