The Federal Government has introduced a new financial instrument, the Domestic FGN US Dollar Bond, as part of a $2bn programme aimed at raising $500m from local and foreign investors. Eligible participants include Nigerians in the diaspora, foreign institutional investors, and residents in Nigeria. To subscribe to the bond, investors must have a Bank Verification Number (BVN) and a National Identification Number (NIN) and make electronic transfers into designated accounts as cash payments are not accepted.
With a 9.75% per annum coupon rate over a five-year tenor, the bond offers an attractive investment opportunity, with a minimum subscription amount of $10,000, making it more accessible compared to traditional Eurobonds. The bonds are exempt from various forms of taxation and will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited, providing liquidity to investors before maturity.
Investors have until August 30, 2024, to participate in the auction, with the settlement date on September 6, 2024. The Minister of Finance, Wale Edun, believes that this bond will bolster external reserves and stabilize the foreign exchange situation in Nigeria.
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