FGN Savings Bond

The Federal Government of Nigeria Savings Bond (FGNSB)

The Federal Government of Nigeria Savings Bond (FGNSB) is an investment product to be issued by the Federal Government of Nigeria (FGN) through the Debt Management Office (DMO) effective March 13 2017. The bond will be an addition to the FGN securities market and is a retail savings product accessible to all income groups. The purpose of the bond is to encourage a national savings culture and create an avenue for investors to benefit from the favourable returns available in the capital market. The FGNSB will be backed by the full faith of the Federal Government of Nigeria and is thus deemed to hold no default risk.

The FGNSB is expected to be issued monthly in tenors of 2 and 3 years via an offer for subscription. The subscription period would be opened for five working days, within which investors can submit their subscriptions through authorized distribution agents.

The May 2017 edition of the Offer for Subscription of the Federal Government of Nigeria Savings Bond (FGNSB) is now open. The Debt Management Office (DMO) has announced that it has been authorized to receive applications for fresh Issues of the FGNSB on the following terms:

1. 2-Year FGN Savings Bond due May 17, 2019
             Interest Rate: 13.189%

2. 3-Year FGN Savings Bond due May 17, 2020
             Interest Rate: 14.189%
 
  • Opening Date: May 8, 2017
  • Closing Date: May 12, 2017
  • Settlement Date: May 17, 2017

Investors may apply for either or both of these maturities, as preferred. Please find below additional information to guide your application:

  • Units of Sale: N1,000 per unit subject to a minimum subscription of N5,000.00 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.00
  • Security: The FGNSB is backed by the full faith and credit of the Federal Government of Nigeria (FGN)
  • Coupon Payment: Payable every quarter with principal repayment at maturity
  • Status
    • Qualifies as securities in which trustees can invest under the Trustee Investment Act
    • Qualifies as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds, amongst other investors
    • Will be listed on the Nigerian Stock Exchange
    • Qualifies as a liquid asset for liquidity ratio calculation for banks
  • Subscription Mode:
    • Investors can subscribe through FBN Securities Limited, for the FGNSB issues being offered by taking the following steps:
    • Open a CSCS stockbroking account with FBN Securities Limited. Please click here to access our account opening forms for this purpose; (N.B: Existing stockbroking clients with CSCS account numbers will only need to provide their CSCS account details).
    • Download the FGNSB subscription form here
    • Make payment for subscriptions with beneficiary name clearly indicated to our below account within the subscription period:

    Account Name:FBN Securities IPO Account
    Bank: First Bank of Nigeria Plc
    Account Number: 2031788029

    • Immediately fill and submit subscription form

    Investors should immediately contact their Relationship Managers or send an e-mail to customercare@fbnquest.com with evidence of payment for immediate confirmation of payment receipt.

    The CSCS is expected to credit investors’ account with allotted FGNSB volume on the settlement date.

    We will be happy to assist you with any further enquiries you may have about the subscription process or trading the FGN Savings Bond on the NSE.

    The DMO has also indicated that in view of the addition of the FGNSB, the new market structure for the FGN Securities Market will be as follows:

    1. FGN Savings Bonds – minimum subscription of N5,000 and maximum of N50,000,000
    2. Nigerian Treasury Bills – minimum subscription of N50,001,000
    3. FGN Bonds – minimum subscription of N50,001,000

    Benefits of Investing in the FGNSB

    • The FGNSB offers steady returns on a quarterly basis as against the bi-monthly coupon payment of the regular FGN bonds, thus the FGNSB ensures a quicker return on investment (ROI)
    • Low default risk as the FGNSB is backed by the full faith of the Federal Government
    • Low investing capital requirement (minimum of N5,000)
    • The investment can be used as collateral for loans since it is backed by the Federal Government of Nigeria
    • The bonds will be listed on the NSE allowing for secondary market dealings
    • Interest income are tax exempt