THE GOVERNMENT WILL ISSUE A HOME DEVELOPMENT BOND TO THE PUBLIC – PRIMARY SECURITY MARKET.
The Solomon Islands Government (SIG) will issue SBD 300 million National Development Bonds (SIG DDB 2022) through public auction on October 19, 2022. SIG DDB 2022 are short to medium term securities, denominated in solomon dollars and repayable at their nominal value at maturity. .
They are tools for influencing liquidity in the financial system – the number of bonds will affect the free liquidity and reserve currency of commercial banks. In addition, the issuance of SIG bonds will help promote the development of the domestic securities market enabling individuals and private sector investors to invest in the primary securities market. The Solomon Islands bond market has been around for quite some time now since the 2000s.
The bond issuance this year will provide more investment opportunities and allow SIG to increase the pool of funds available for investment in the productive sector of the economy and infrastructure development.
The Solomon Islands Minister of Finance and Treasury (“MoFT”) issues bonds on behalf of SIG pursuant to Section 3 of the Government Loans and Securities Act, CAP 119 of the Solomon Islands Revised Laws.
National Development Bonds are offered in a range of tenors, ranging from 2 years, 3 years and 5 years. These SIG bonds are short and medium term security instruments available to the public for purchase through the auction mode.
The issuer is the Solomon Islands Government (SIG) and the issuing agent is the Central Bank of Solomon Islands (CBSI). As appointed issuing agent, CBSI is responsible for the management and administration of bond issuance transactions pursuant to Section 24(2) of the Government Loans and Securities Act, CAP 119 of the Revised Acts of the Solomon Islands.
The Registrar is CBSI. As Registrar, CBSI is responsible for maintaining a register relating to the issuance of bonds pursuant to Section 14(4) of the Government Loans and Securities Act, CAP 119 of the Revised Laws of the Solomon Islands .
An eligible bidder may bid for bonds either in its own name or as the legal representative of a company, institution or trust.
The bond will be issued through public tenders. Tenders are conducted by the CBSI and the SIG DDB 2022 Tender Committee, in accordance with the “SIG Bond Operational Guidelines”. Offers will only be accepted if submitted in accordance with the bond prospectus. CBSI reserves the right to accept any offer for the full volume of the offer, or any part thereof, and to reject any offer or part thereof.
To date, the main players have been individual investors and private companies. Visit the CBSI website – https://cbsi.com/monetary-policy/market-operation and MoFT: https://solomons.gov.sb/ministry-of-finance-and-treasury for more information regarding the specific bond auction information.
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