The latest financial instrument introduced by the Federal Government requires investors to meet specific identification requirements to participate. These requirements were outlined in a Frequently Asked Questions document released by the Debt Management Office. To invest in the domestic dollar bond, Nigerian citizens, including those residing abroad, must possess both a Bank Verification Number and a National Identification Number.
The government aims to raise $500 million from local and foreign investors through this bond issuance, which is part of a larger $2 billion program. Eligible participants include Nigerians residing in Nigeria, those in the diaspora with foreign exchange savings, and foreign institutional investors.
Subscriptions to the Domestic FGN US Dollar Bond cannot be made in cash; all payments must be done through electronic transfers into designated accounts. Investors can subscribe to the bond electronically or through financial institutions. Funds from domiciliary accounts must have been in the account for at least 30 days before the application date.
The bond, offering a 9.75% per annum coupon rate over a five-year tenor, is targeted at both domestic and international investors. It has a minimum subscription amount of $10,000, distinguishing it from traditional Eurobonds with a higher entry threshold.
Income from the bonds is exempt from various forms of taxation, making them an attractive investment option. They will be listed on the Nigerian Exchange Limited and the FMDQ Securities Exchange Limited for trading liquidity. The auction for this bond will be open until August 30, 2024, with the settlement date set for September 6, 2024.
The $500 million domestic dollar bond is expected to boost external reserves and contribute to stabilizing the foreign exchange situation in the country, as stated by the Minister of Finance and Coordinating Minister of the Economy.
FG demands BVN, NIN for $500m bond subscription
