It’s a debt security i.e. a long term financial obligation or Secured loan
- – It’s a debt security i.e. a long term financial obligation or Secured loan
- – Issuer (Lender)
- – Holder (Borrower or Investor)
- – Issued through underwriting or auctions
- – May be issued at Par, Discount or Premium
- – Usually either Government or Corporate Issued
- – Long term debt instrument
- – It is listed on the stock exchange and is therefore tradable
- – Government bonds are tax free
- – May be fixed coupon or floating rate bonds
- – Government bonds with 3yrs maturity or less qualify as liquid assets
Some Key Terms
- – Nominal Amount: Amount the issuer pays interest on.
- – Issued Price: Price at which investors buy the bonds on its first issue
- – Maturity Date: Date on which the issuer has to repay the nominal amount
- – Coupon: Interest rate paid by issuer to bond holders
- – Coupon Date: Dates on which issuer pays the coupon to the bond holders
- – Indenture: Document specifying the rights of the bond holders
- – Optionality: A bond may grant optional features to the buyer or issuer
- – Convertible bond: Can be exchanged for shares of the issuers common stock
- – Exchangeable Bond: Can be exchanged for shares of any corporate other than the issuer
- – An alternate form of investment
- – Returns higher than inflation thus good for long term investors
- – Statutory requirement for some Corporate institutions
- – Multiple series of income i.e. twice a year
- – Letter expressing desire to invest in Bonds and authority to debit account thereafter
- – Custodial authority duly signed by client
- – Copy of physical bill duly signed by investor and reflecting issuers name
- – Duly signed investment contract confirmation letter showing issuers name.
- – Filled KYC form
– Account opening form with passport attached and means of identification
– Cheque or lodgment slip
– Custodial authority duly signed by client
– Copy of physical bill duly signed by investor and reflecting issuers name
– Duly signed investment contract confirmation letter showing issuers name.
– Filled KYC form
- – Federal Government of Nigeria offer specific amounts of bonds in a series.
- – TROPS collects and distributes forms to Business Offices (where such business offices do not have access to CBN).
- – Customers collect, complete and return original bid forms indicating the rate at which they wish to bid
- – Business Offices debit customers accounts and warehouse the funds in an appropriate TROPS Suspense Account at the branch.
- – Business Office forward duly completed bid forms together with a schedule stating the customers’ names, account numbers and bid amounts and a covering memo to Treasury Operations (TROPS) after moving funds to TROPS Transit Account NGN09991931101.
- – No bids will be submitted unless customers account has been debited for the value of the bid using customer induced code.
- Business Office will keep schedule and copies of all duly completed application forms submitted through them.
- – All bid forms must get to TROPS at least 24hrs before the last bid date.
- – Upon receipt of bids from branches, TROPS confirm that amount moved by respective Business Offices agree with the total value of bids submitted.
- – TROPS collates and consolidates all duly completed forms received bank-wide and reviews it for completeness.
- – TROPS prepares a covering letter stating: Names of Customers, Face Value, Issue Date, Maturity Date, Tenor and individual customers’ Bid Rates and submits same together with original copies of the customers bid forms at the CBN/Debt Management Office on the bid date.
- – On each bid day, TROPS advice Treasury of the total value of bids received bank wide. (see appendix for bid days)
- – Treasury funds our CBN account to accommodate the banks bid.
- – CBN debits our CBN Account with the value of successful bids and issues the bank an Allotment letter stating the total amount allotted, the issue and maturity dates and the coupon rate.
- – Where bids are unsuccessful, TROPS will credit the customers and furnish the Business Offices with a schedule showing all the unsuccessful bids from the branch.
- – Business Office will debit the above account and credit customer with the bid amount.
Frequently Asked Questions
- UBA’s financial year-end was originally March of each year. After the merger of UBA and STB, with effect from 1 August 2005, the bank’s financial year-end was changed to September. However, with the CBN policy on uniform year end, the reporting period is now December. In addition, UBA reports interim results of the group every three months to the Nigerian Stock Exchange and to shareholders in the Nigerian Press within 15 days after the expiration of the reporting period.
Yes you can. Kindly contact our registrars, Africa Prudential Registrars Limited to set this up. Please see their contact details below:
Business Development and Relationship
Africa Prudential Registrars Limited
220B, Ikorodu Road, Palmgrove
The merger between United Bank For Africa Plc and Standard Trust Bank Plc came into effect on 1 August 2005.
The current tax legislation requires that a withholding tax of 10% be deducted at source from all dividend payments.