The Debt Management Office (DMO) launched subscriptions on Monday for two new Federal Government of Nigeria (FGN) savings bonds, priced at N1,000 per unit.
The first offering is a two-year savings bond, maturing on June 11, 2027, with an annual interest rate of 16.121 percent.
The second is a three-year savings bond, maturing on June 11, 2028, offering a higher annual interest rate of 17.121 percent.
These new offerings come despite a noticeable decline in investor interest for short-term bonds.
The FGN savings bond initiative is specifically designed for retail investors, providing them with guaranteed quarterly interest payments and a full repayment of their principal at maturity.
In a statement on its official X handle on Sunday, DMO said the offers opened on June 2, 2025, and will close on June 6, 2025.
The DMO said the settlement date is June 11, 2025, while coupon payment dates are made quarterly – September 11, December 11, March 11 and June 11.
“They are offered at 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 million.
“Interest is payable quarterly while bullet repayment is made on the maturity date,” it stated.
It said the savings bonds, like all other government securities, are backed by the full faith and credit of the Federal Government and charged upon the general assets of Nigeria, adding that they also qualify as securities in which trustees can invest under the Trustees Investment Act.
“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption and pension funds, amongst other investors,” DMO said.
The agency further said the bonds are listed on the Nigerian Exchange Limited (NGX) and qualify as a liquid asset for liquidity ratio calculation for banks.
Weak investor appetite for short-term bonds saw the Debt Management Office (DMO) raising only N295.98 billion from its N300 billion May 2025 Federal Government of Nigeria (FGN) bond auction.
According to the result published on the DMO website, investors showed a preference for longer-term bonds as the five-year FGN bonds maturing in April 2029 experienced weak demand and were undersubscribed by as much as 83 per cent,
The FG has shown a preference for borrowing from the domestic bond market and has so far borrowed a total of N1.94 trillion from bond investors in the first quarter of 2025.
The borrowings are part of the government’s plan to fund its budget deficit of N13 trillion.
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