On behalf of the federal government, the Debt Management Office (DMO) on Tuesday announced the offer for a subscription to the November 2022 federal bond offering.
According to the notice issued by the DMO, there will be two tranches for the issuance. Interest rates are 12.492 per cent and 13.492 per cent respectively for 2- and 3-year savings bonds.
This shows that the interest rates increased from 11.382 per cent and 12.382 per cent in October for the 2-year and 3-year Savings Bonds.
The FGN Savings Bond yield has been on the rise since the Central Bank of Nigeria adopted a hawkish monetary policy to combat inflation in the country.
The CBN had raised the monetary policy rate (MPR) by a combined 400 basis points to 15.5 per cent in a bid to tame the surge inflation rate, which had touched a 17-year high in September 2022. Following the MPR rate hike, savings bond rates have also been rising to reflect the changes in the benchmark rate.
Between May and November, the interest rate for the 2-year FGN savings bond has moved from 7.934 per cent to 12.492 per cent per annum, while the 3-year bond has seen its rate increase from 8.934 per cent to 13.492 per cent in the same period.
The opening date for subscription was November 7th, 2022 and the closing date is November 11th, 2022. The settlement date is November 16th, 2022 and coupon payment dates will be on February 16th, May 16th, August 16th, and November 16th 2023.
In the circular, N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.
A breakdown of the bonds shows that the 2-year FGN savings bond will be due on 16th November 2024, at 12.492 per cent per annum and the 3-year FGN Savings Bond will be due on 16th November 2025, at 13.492 per cent per annum.
