$500M Bond: FG Demands BVN, NIN From Subscribers

According to the FAQ, all Nigerian citizens, including those living overseas, must have a Bank Verification Number and a National Identification Number in order to invest in the domestic dollar bond that was issued on Monday.

This bond is a component of a larger $2 billion initiative and is issued within the country.

Approved by the President upon the recommendation of the Minister of Finance and the Coordinating Minister of the Economy, the bonds offer a coupon rate of 9.75 percent per annum over a five-year term.

They are aimed at both domestic and international investors, with a minimum subscription requirement of $10,000.

This bond stands out from conventional Eurobonds mainly due to its accessibility, featuring a reduced minimum investment of $10,000 instead of the usual $200,000 required for Eurobonds.

Furthermore, it aligns with the Central Bank of Nigeria’s standards for liquid assets, qualifying it for banks’ liquidity ratio assessments, and it is also appropriate for inclusion in pension fund portfolios.

The DMO’s FAQ highlights that earnings from these bonds are free from various taxes, such as Companies Income Tax, Personal Income Tax, and Capital Gains Tax, which makes them an appealing investment choice.

Additionally, the bonds will be available for trading on both the Nigerian Exchange Limited and the FMDQ Securities Exchange Limited, providing liquidity for investors looking to sell before maturity.

The auction for these bonds will be open until August 30, 2024, allowing investors ample opportunity to take part in this offering.

The settlement date, marking the confirmation of purchases for investors and the commencement of interest accumulation, is scheduled for September 6, 2024.

Wale Edun, the Minister of Finance and the Coordinating Minister of the Economy, previously stated that the $500 million domestic dollar bond aims to boost external reserves and contribute to stabilizing the country’s foreign exchange environment.