BVN, NIN required for Nigeria’s $500 million bond subscription.

The Federal Government of Nigeria has disclosed the need for specific identification requirements for its latest financial instrument, the Domestic FGN US Dollar Bond.

The Debt Management Office (DMO) made this known in a Frequent Asked Questions (FAQ) provided on its website.

To participate in this investment opportunity, all eligible participants must possess a Bank Verification Number (BVN) and a National Identification Number (NIN).

Secondly, investors can only subscribe to the bond either electronically or through financial institutions. It is essential to note that cash payments are not accepted.

Also, for those intending to use balances in their domiciliary accounts for subscription, the funds must have been in the account for at least 30 days before the application date.

The Domestic FGN US Dollar Bond boasts an attractive 9.75% per annum coupon rate over a five-year tenor. With a minimum subscription amount of $10,000 and additional increments of $1,000, this bond is accessible to a wide range of investors.

Eligible participants include Nigerians resident in Nigeria, Nigerians in the diaspora with foreign exchange savings abroad, and foreign institutional investors. Pension funds are also eligible to invest in this bond, providing a secure investment option for retirement planning.

One of the standout features of this bond, as revealed by the DMO, is its tax-exempt status. Income earned from the bond is exempt from Companies Income Tax, Personal Income Tax, and Capital Gains Tax, ensuring that investors retain a significant portion of their returns.

The issuance duration for the bond is from August 19 to August 30, 2024, providing investors with a sufficient window to participate. The settlement date, when investors will have their purchases confirmed and interest will begin accruing, is set for September 6, 2024.

The Federal Government plans to utilize the proceeds from the bond to finance critical sectors of the economy, enhance external reserves, and stabilize the foreign exchange situation. This strategic move aims to promote economic growth, development, and stability in Nigeria.