Home Breaking News Fed Govt serviced domestic debts with N612.7b in three months

Fed Govt serviced domestic debts with N612.7b in three months

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By Nduka Chiejina (Assitant Editor)

The Federal Government has spent N612.71 billion from January to March 2021 to service domestic debt obligations.

In a report released yesterday by the Debt Management Office (DMO), the government redeemed its Nigerian Treasury Bills (NTB) obligations by paying holders of mature NTBs N17.23 billion in January, N12.3 billion in February and N5.49 billion in March 2021. These implied that the federal government paid N35.03 billion to NTB holders in the first quarter of the year.

To holders of FGN bonds, the federal government paid N537.783 billion in three instalments of N201.95 billion in January, N79.26 billion in February and N256.58 billion in March.

The government also redeemed its obligations to subscribers of mature FGN Savings Bond by paying out N308.38 million in three tranches of N111.65 million in January, N97.074 million in February and N99.65 million in March 2021.

Also, the sum of N8.16 billion was released to settle FGN Sukuk Rentals in March 2021. No payout was made for the previous two months.

While no releases were made for mature promissory notes in the three months, the government released N31.44 billion as principal repayment “in respect of promissory notes.

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A month-on-month breakdown indicated that a total of N219.29 billion was released to service domestic debts in January, N123.09 billion was released in February while N270.33 billion was released in March, thus bringing the total amount spent to service domestic debt to N612.71 billion.

The government is currently offering new savings bonds for the month of June 2021, in continuation of its monthly issuance. The government is offering annual interest of almost 10 per cent on its latest issuance of the monthly Federal Government of Nigeria Savings Bond (FGNSB).

Application list for the two tranches of bonds for June 2021 had opened on Monday, June 7, 2021 and will close on Friday, June 11, 2021. The settlement date for the issuance, which becomes the effective calculation date is Wednesday, June 16, 2021.

The government is offering a 2-Year FGN Savings Bond due June 16, 2023 at a coupon of 8.889 per cent per annum. It is also simultaneously offering a 3-Year FGN Savings Bond due June 16, 2024 at coupon of 9.889 per cent per annum. The June 2021 offer is the 48th tranche of the savings bond, introduced in 2017.

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Usually, the minimum subscription to the bonds, offered at N1,000 per unit, is N5,000 or five units and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

The coupon payment dates for the bonds, which pay interest rate quarterly September 16, December 16, March 16 and June 16 respectively.

The FGNSB was introduced in 2017 as a mass instrument for nationwide mobilization of savings and investments. Minimum subscription to the FGNSB is usually N5,000 while the bond pays coupon or interest rate on a quarterly basis.

 



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