Kathmandu: Nepal Rastra Bank (NRB) is to issue development bond worth Rs. 5 billion with a maturity period of 7 years.
Development Bond named “Development Bond 2081 Kha” will issue through competitive and non-competitive bidding, according to notice of Public Debts Management Department, NRB.
Banking and financial Institutions, non-banking financial institutions, insurance companies, organised group and general public can apply for the bond.
The bank said that the interested parties would have to submit their bids documents through Online Bidding System Software of NRB by 2 pm Sunday (November 5, 2017).
Interested parties can apply for bonds worth minimum of Rs 50,000 and maximum bonds worth an amount not exceeding the size of total issue and divisible by 50,000 without remainder.
Altogether 80 per cent (Rs. 4 billion) of the bond amount is allotted for competitive bidders and the remaining 20 per cent (Rs. 1 billion) for the non-competitive bidders, read the bank’s notice.
The group ‘A”, ‘B”, and ‘C’ banks and financial institutions licensed from NRB would not participate as non-competitive bidders, read the notice.
Rates quoted by subscribers through bidding will determine the coupon rates, or the yield, of the development bond proposed by the participants taking part in the competitive bids. The central bank will provide semi- annually where interest income is taxable.
The bond holders can take loans as collateral the bond. The secondary trading of the bond will be transacted through Nepal Stock Exchange (NEPSE).