The Bhutanese Leading the way.
As of 12.20 PM on 30th May, there a total of 24,040 people subscribed to the Gelephu Mindfulness City Nation Building Bond (GNBB) with a value of Nu 2.364 billion (bn). This reached 31,772 people with Nu 3.019 bn on 12.20 pm 2nd June after an extension was given till 3rd June. All who invested will be fully alloted GIDC announced.
The rush as in the usual Bhutanese style was all last minute leading to an oversubscription.
Such a response led to the GIDC extending the deadline and saying everyone will be alloted.
The bond is listed on the Royal Securities Exchange of Bhutan Limited (RSEBL). There is a mandatory lock-in period of five years for all bondholders.
GNBB offers a 10 percent annual interest rate and is exempt from Personal Income Tax (PIT). Only Bhutanese citizens residing within Bhutan are eligible to subscribe to the bond.
However, secondary market trading is permitted after one year from the date of allocation, but trading is restricted to individual investors; institutional investors are not allowed to participate in the secondary market.
Redemption is only allowed upon maturity, and premature redemption is not permitted. In the event of a financial emergency, a bondholder may liquidate the bond in the second year by converting it into cash through the secondary market.
After five to six years, bondholders can either sell the bond back to the company, GIDC, or place it on the secondary market.
As with any investment, the GNBB carries inherent risks, including market, liquidity, and counterparty risks. Investors are encouraged to review the Prospectus carefully and assess their risk appetite accordingly.
The funds raised through the GNBB will be used to develop the international airport in Gelephu Mindfulness City, which has an estimated initial cost of USD 500 million. The airport is intended to position the city as a gateway to South Asia and Southeast Asia.
