The Federal Government has announced that investors seeking to participate in its newly issued domestic dollar bond must meet specific identification requirements.
This was revealed in a Frequently Asked Questions (FAQ) document provided by the the Debt Management Office (DMO) on its website.
The (FAQ) document clarified that all Nigerian citizens, including those residing abroad, must possess a Bank Verification Number (BVN) and a National Identification Number (NIN) to subscribe to the BOND, which will be issued on Monday.
The bond, which was launched as part of a broader $2 billion programme, seeks to raise $500 million from local and foreign investors in its first tranche.
Eligible participants include Nigerians living in the country, those in the diaspora with foreign exchange savings abroad, and foreign institutional investors.
The DMO’s FAQ emphasized that subscriptions cannot be made using cash; all payments must be conducted via electronic transfers into designated accounts.
Furthermore, if investors plan to use funds from domiciliary accounts, those funds must have been in the account for at least 30 days prior to the application date.
This initiative, according to Finance Minister Wale Edun, is expected to enhance Nigeria’s external reserves and contribute to stabilizing the country’s foreign exchange situation.
This financial instrument, offering a 9.75% per annum coupon rate over a five-year period, is targeted at both domestic and international investors. It also features a minimum subscription amount of $10,000, significantly lower than the $200,000 typically required for Euro bonds.
Additionally, the bond qualifies as a liquid asset under the Central Bank of Nigeria’s regulations, making it suitable for inclusion in banks’ liquidity ratios and pension fund portfolios.
An attractive feature of this bond is its exemption from various taxes, including Companies Income Tax, Personal Income Tax, and Capital Gains Tax. Furthermore, the bond will be listed on both the Nigerian Exchange Limited and the FMDQ Securities Exchange Limited, providing liquidity options for investors wishing to trade before the bond’s maturity.
The auction for the bond remains open until August 30, 2024, with the settlement date set for September 6, 2024, when interest will begin accruing.
