Saturday 22 September, 2018

11 things to know about the National Investment Fund

Fixed income bonds of the National Investment Fund Holding Company Limited (NIF) officially went on sale on Thursday.

The NIF bond will be offered to institutions and individuals with the objective of raising TT$4 billion.

But, what exactly is the NIF?

Here are 11 things you ought to know about the NIF, especially if you’re interested in purchasing bonds.

1. The National Investment Fund Holding Company Limited (NIF) is a special purpose investment company created by the Government to monetise its assets held in the form of shares of various corporate entities in Trinidad and Tobago.

2. But first, what is a bond? According to Time, when you purchase a bond, you effectively are lending a company or a government money. The bond issuer is the borrower. It agrees to pay whoever holds the bond interest on a regular basis, and then to return the principal on the loan when the bond matures.

3. The NIF bond is supported by some of the strongest companies, with a collective market value of approximately TT$7.9 billion, including shares of Republic Financial Holdings Limited, One Caribbean Media Limited, West Indian Tobacco Company Limited, Angostura Holdings Limited, and Trinidad Generation Unlimited.

4. The NIF plans to issue a bond in the amount of TT $4 billion in three Series as follows:

1. Series A - TT $1.2 billion with a tenor of 5 years at a fixed rate of 4.5%

2. Series B - TT $1.6 billion to TT $2.0 billion with a tenor of 12 years at a fixed rate of 5.7%

3. Series C – TT $800 million to TT $1.2 billion with a tenor of 20 years at a fixed rate of 6.6%

5. Citizens can invest from as little at TT$1000, choosing from a series with fixed rate options from 4.5% annual interest over 5 years, to 5.7% annual interest over 12 years, or 6.6% annual interest over 20 years.

6. Tax free interest would be paid every six months and the principal amount would be paid upon bond maturity.

7. Government, through the Ministry of Finance, has partnered with First Citizens Brokerage and Advisory Services Limited as the lead broker of the NIF bonds as well as other sub brokers. Application forms would be available at all brokers and First Citizens branches across the country.

8. To subscribe for Bonds in this Offer, an applicant must have a brokerage account and must complete and submit an application form. However, applications valued at TT$90,000 or more must be submitted to the applicant’s broker. Two forms of valid government issued photo identification, a utility bill, a job letter and an active bank account are the minimum requirements to open an account.

9. The Shares represent 100% of the present total assets of the Company and are the sole assets securing the Bonds. Consequently, the performance of the companies which shares comprise the Shares will affect the value of the Bonds.

10. The Bonds have been rated CariAA – Regional Scale (Local Currency Rating) and ttAA – National Scale by CariCRIS. These ratings, which are of investment grade quality, indicate that the level of creditworthiness of this debt obligation, compared to other debt obligations in the Caribbean and within Trinidad and Tobago, is high. A stable outlook for the bonds has also been assigned. 

11. The sale of these bonds will end August 9, 2018 at 4 pm or later, at the discretion of the Company.

The results of the allocation of the Bonds are expected to be announced by 30 August, 2018. Investors will be notified of the percentage of their original application that each Investor received.

Visit www.nif-tt.com for a copy of the prospectus for more information and details on how to invest.

 

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