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1. Central Bank of Samoa
Security description
These
documents have been prepared for those resident financial entities,
companies and individual members of the Samoan public, who are
interested in becoming potential investors of CBS securities. All
interested investors must register as bidders before they can
participate in the tender for CBS securities. The CBS securities
Prospectus gives an outline of the criteria potential investors need
to meet to be accepted as registered bidders.
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2. Fees &
Tax Reductions
The
registration, issue, transfer and redemption of Securities will be
made free of any duty, charge, or levy, except to the extent
required by law.
The
withholding tax provisions of the Income Tax Administration Act 1974
apply to the Securities.
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3. Deductions
In
accordance with the provisions of the Income Tax Administration Act
1974, withholding tax will be deducted from payments of interest to
Security holders, unless an original or certified copy of an
exemption certificate is produced to the Bank two Banking days
before the maturity date.
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4.
Announcement of Periodic Tenders
Invitations
to tender for Securities will be made by the Bank, usually one week
before the closing date of each tender, by information release
available from the Bank and advertisements published in the media.
Invitations to tender will include the following information:
- the amount, issue
dates and the maturity dates of the Securities for which bids
are invited
- the closing
date and time for bids;
- the manner in
which bids should be placed;
- settlement
arrangements;
- the
announcement date and time of results of such tenders.
All invitations
to tender and all tenders for Securities shall be made interms of
and pursuant to the Prospectus relevant for the upcoming auction and
this Operational Guidelines. However, no liability will be
assumed by the Bank for the non-receipt or any delay in the receipt
of the Invitation to Tender by any prospective bidder.
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5. Eligibility Criteria
Bids
may be placed only by bidders who are registered with the Bank. All
prospective bidders must make an application for registration as a
bidder at least two banking days before the day of the tender. Once
registered, a bidder need not apply for registration in respect of
subsequent tenders unless the registration has been cancelled by the
Bank or the bidder needs to change any part of its existing
registration. Only residents of Samoa are eligible for registration
and only those residents who are 18 years of age and older will be
considered for registration.
Residence is normally determined by the
country in which the individual is living at the time and either
has been or intends to continue so living for more than one
year. When, therefore, an individual who has hitherto been resident
abroad comes to Samoa for a period of one year or less than one
year, he will normally be regarded as a non-resident. A business
established in Samoa is normally regarded as a resident. Members
and staff of the Central Bank, including their immediate relatives,
are not eligible to bid for the Securities.
The Bank reserves the
right to reject any application for registration or to cancel any
such registration at any time. Application forms for registration
are available from the Banking & Corporate Services Department,
Central Bank of Samoa, Central Bank Building (Ground Floor), Apia.
Applicants will be informed on whether or not they have been
accepted to the register of bidders. For more information, contact
either the Manager (telephone 34250) or the Assistant Manager
(telephone 34253) of the Banking and Corporate Services Department.
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6. Amounts of Bids
Competitive
Bids
A competitive bid is one where the investor specifies the
amount to be invested at the yield to maturity (interest rate) that he
or she is willing to accept. Investors may submit any number of
(multiple) bids, with each bid for a different yield to maturity. Each
bid for Securities must conform with the amounts specified in the
prospectus relevant for the upcoming auction.
Non-competitive
Bids
A non-competitive bid is one where the investor specifies
the amount to be invested at the weighted average yield of the
accepted competitive tenders. Only one non-competitive tender may
be submitted per investor, otherwise all of an investor’s
non-competitive bids will be rejected. Bids must conform with the
amounts specified in the prospectus relevant for the upcoming auction.
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7. Yield for maturity for
competitive
Bids
must be priced in terms of a yield percent per annum. Each competitive
bid must state clearly the yield to maturity (percentage per annum)
sought by the bidder. The yield should be expressed to the second
decimal place (for example, 3.25%, 4.55% or 5.12%). Decimal places
beyond two will be disregarded.
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8.
Submission of Bids
Bids
must be submitted by entering all the required details in the prescribed
tender form available from the Bank (address given above). The
completed tender form(s) must be signed by the person/s whose
signature/s have already been registered with the Bank. The completed
tender form(s) should be sealed in an envelope(s) and deposited in the
special tender box provided at the Enquiries Counter of the Central Bank
of Samoa, Central Bank Building (Ground Floor), Apia before the closing
time stipulated in the Invitation to Tender.
No bid
may be withdrawn or amended after it has been lodged
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9. Acceptance or
Rejection of Bids
The
Bank reserves the right to accept bids for the full amount on offer in
the tender or any part thereof. The Bank also reserves the right to
reject any bid or part thereof on any grounds whatsoever.
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10.
Allotment of Securities
Competitive
Bids
Allotment of Securities in respect of bids accepted by the Bank will be
made in ascending order of yields bid, until the total face value of
Securities offered or a lesser amount as determined by the total amount
of acceptable bids, is taken up. At the highest yield accepted,
Securities will (if necessary) be allotted as far as practicable on a
pro-rata basis in relation to the amount available at the yield, except
that no successful bidder shall be allotted an amount that is not an
exact multiple of the minimum amount specified (face value).
Non-Competitive
Tenders
Non-competitive tenders will be allocated up to 10% of the face value of
the total amount offered. The price of such tenders will be calculated
by applying the weighted average yield of the accepted competitive
tenders. When the sum of non-competitive bids fall short of the amount
of bills offered for non-competitive tenders, the shortfall will be
allotted for competitive tenders.
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11.
Announcement of Results
The
results of a tender will be available from the Bank after 3:00 p.m. on
the closing day of the tender. The bidders who wish to have the
information immediately are, therefore, advised to telephone the
Manager, Banking & Corporate Services Department, Central Bank of Samoa,
Central Bank Building (Ground Floor), Apia. Telephone: 34250 or call at
his office to obtain the results of their respective bids. The results
released will be confirmed by a letter.
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12.
Settlement of Amount
The
settlement amount (price) of a successful bid shall be calculated on the
basis of a yield to maturity and a 365 day year. The formula for
calculating the settlement amount is as follows:
The
settlement amount will be rounded up to the nearest cent.
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13.
Settlement of Bids
Unless
otherwise stated on the Invitation to Tender, settlement must be made on
issue day, which is the first Banking Day after the day of the tender.
The successful bidders, other than the commercial banks, should settle
the amount due in full by delivering cash or a cheque payable to the
Central Bank of Samoa by 2:00 p.m. on the issue day to the Bank.
Settlement in cash should not exceed the amount specified in the
prospectus relevant for the upcoming auction. Receipts will be
issued upon settlement on issue day while Security certificates will be
available for collection and issued once cheques have been cleared. On
issue day, successful bidders may request their allotments to be divided
up into a maximum of four certificates. For the commercial banks,
settlement will be effected by debiting their Exchange Settlement
Accounts at the Central Bank. The Bank reserves the right to cancel
bids not settled as required above.
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14.
Registration of Securities
The
Securities issued will be registered at the Bank and a certificate of
title will be issued in the name of the successful bidder. Securities
may be held by individual persons, or two or more persons as joint
holders. Organizations or trusts that are not incorporated should
complete their application in the full name/s of the trustee/s.
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15.
Register of Securities
The
Bank shall enter in the Register the following particulars of the
Securities and their holders at issue date:
-
Name and address of the
Security holder;
-
Face Value (Principal) of the Securities held;
-
Issue date and Maturity Date of the Securities;
-
Settlement amount of the Securities;
-
Yield rates of the Securities; and
-
Such other particulars as may, from time to time be required by the
Bank.
The Bank may correct
errors and remedy omissions in the Register and may call in any
outstanding certificates for that purpose.
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16. Transfer of
Ownership
The
Securities are negotiable and transferable. However, they may only be
transferred to a resident of Samoa and only to those residents who are
18 years of age and over. Transfers are effected by endorsement on the
back of the Securities. Each transfer of Securities must be of a minimum
amount of $1,000 (face value) and in multiples of $100 (face value)
thereafter. Upon the Security’s maturity, repayment will be made to the
last holder of the Security.
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17. Discounting at the Bank
The
Securities may be sold back to the Bank before they mature, at a
discount rate determined and published by the Bank from time to time.
Initially, the discount rate is fixed at one percentage point (100 basis
points) margin above the yield rate per annum at issue or at the most
current auction rate, whichever is higher. The Bank may also offer to
buy back any outstanding bills from time to time at negotiable prices.
The following formula shall be applied for calculating the rediscounted
value of the Securities .
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18. Repayment of Maturity
The
maturity date of each issue of Securities will be specified in the
Invitation to Tender. The Securities must be physically presented to the
Registrar preferably one working day before the maturity day for speedy
processing of the repayments. The Bank will repay the face value of the
Securities, after deducting the withholding tax applicable to the
interest component. Security holders are repaid starting from 2.00 PM
on the day the Securities mature. If the maturity day is a Bank Holiday,
repayment is made on the next Banking Day without payment of additional
interest.
Repayment of Securities
will be made by cheque only and upon surrendering the certificates for
the Securities that have matured. In the case of Securities which have
remained with the registered holder, repayment cheques will be
despatched in accordance with the option specified by that holder on the
tender form. In the case of Securities which have been transferred,
repayment cheques will be despatched to the last holder of the said
Securities. The last holder in the latter case will be required to show
adequate proof of identity before any payment is made.
Repayment of Securities
held by commercial banks will be credited to their Exchange Settlement
Accounts held with the Central Bank, upon physical presentation of the
Securities to the Central Bank.
In case the certificates
are either lost or destroyed beyond recovery, authorised holders or
persons designated by them need to complete and lodge a Lost/Destroyed
Declaration Form with the Bank and to make other necessary arrangements
with the Bank before any amount is considered for payment.
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19. Reissue of
Certificates & Titles
A Security may be
presented to the Bank for reissue in smaller denominations up to a
maximum of four Security certificates and totalling its original face
value. A Security can only be reissued to its last holder.
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20.
Definitions
Key Terms & Definitions
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Banking Day
-
Invitation to Tender
-
Issue Date
-
Last Holder
-
Maturity Date
-
Prospectus
-
Registrar
-
Resident of Samoa
-
Yield of Maturity
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Banking Day |
Means a
day not being a Saturday, Sunday or a day declared by the Government or
the Bank as a statutory holiday applicable to banks in Samoa. |
|
Invitation
to Tender |
Means an invitation issued pursuant to the Prospectus specifying the
details of the Securities to be offered by way of tender. |
|
Issue
Date |
Means
the date, as specified in the Invitation to Tender, from
which the life of the Security starts. It is also the date on which the Security’s full
cost price is to be paid or settled.
It is also known as the Settlement Date or Value
Date. |
|
Last
Holder |
In
the case of a Security which have remained with the
registered holder throughout its specified term, the last
holder is the registered holder.
In the case of a transferred Security, the last
holder is the one to whom the Security was last transferred. |
| Maturity
Date |
Means
the date, as specified in the Invitation to Tender, on which
the Securities will be redeemed or repaid by the Bank. |
| Prospectus |
Means
the relevant Prospectus for Central Bank of Samoa
Securities.
|
| Registrar |
Means
the registrar of Central Bank of Samoa Securities which is
the Central Bank of Samoa.
|
| Resident
of Samoa |
Means
a person or body corporate defined as a Resident of Samoa
for the purpose of administration of Exchange Control
regulations by the Central Bank of Samoa under the Central
Bank of Samoa Act 1984 and the Currency and Exchange Control
Regulations, 1961.
|
| Yield
of Maturity |
Means
the percentage rate of return per annum on the price at
which the Securities have been issued to the successful
bidders.
|
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21.
Directory
For all matters relating
to the Central Bank Securities, please contact:
Manager
Banking & Corporate
Services Department
Central Bank of
Samoa
Private Mail Bag
Apia
Samoa (Western)
Ph: (685) 34100;
34250
Fax: (685) 20293;
24058
Email: centralbank@cbs.gov.ws
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