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Niue Development Bonds Act 1994

NIUE LAWS
LEGISLATION AS AT DECEMBER 2006

NIUE DEVELOPMENT BONDS ACT 1994

1994/181 – 28 March 1994

PART 1
PRELIMINARY

1 Short title
2 Interpretation

PART 2
NIUE DEVELOPMENT BONDS

3 Power to issue Bonds
4 Terms of issue
5 [Repealed]
6 Prospectus
7 Non-resident withholding tax
8 Part of Income Tax Act
9 Jurisdiction
10 Secrecy

SCHEDULES

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To enable the Niue Bank to borrow money for development purposes by issuing Niue Development Bonds

PART 1
PRELIMINARY

1 Short title

This is the Niue Development Bonds Act 1994.

2 Interpretation

In this Act –

"applicant" means any eligible person making an application for a Bond;

"Bank" means the Niue Bank;

"Bond" means a Niue Development Bond issued under this Act;

"bond certificate" means a bond certificate in the form specified in Schedule 3 issued by the Bank;

"bondholder" means a holder in due course of a Niue Development Bond;

"date of commencement" means the date of receipt by the Bank of an application plus any payment required by clause 3(4) of Schedule 1;

"date of repayment" means the date on which the Bank is required to make available the amount of the Bond and any interest required to be paid under clause 6 of Schedule 1;

"maturity" means the date on which a Bond becomes repayable;

"memorandum of transfer" means a memorandum of transfer in the form specified in Schedule 4;

"Minister" means the Minister of Finance;

"non-resident" means a non-resident for the purposes of the Income Tax Act 1961;

"Register" means the register of Bondholders kept by the Bank under this Act;

"special terms" means those additional terms of issue approved by Cabinet in accordance with clause 10 of Schedule 1;

"Treasurer" means the Treasurer as defined in the Income Tax Act 1961.

PART 2
NIUE DEVELOPMENT BONDS

3 Power to issue Bonds

(1) Notwithstanding any other provision of this Act or any rule of law, the Bank may, with the approval of Cabinet, issue negotiable fixed or floating rate coupon bonds if it appears to the Bank to be necessary or expedient in the public interest to do so.

(2) Any Bonds issued under this Act shall be termed "Niue Development Bonds".

4 Terms of issue

(1) The Bonds shall be issued by the Bank under the terms and conditions of issue specified in Schedule 1 (which shall include any Special Terms approved by Cabinet in accordance with clause 10 of Schedule 1) as may be amended, provided that no amendment shall affect the terms of issue of any Bond on issue at that time until the Bank is renewed.

(2) The Bank shall have the right to amend the terms and conditions of issue upon written notification to Bondholders of any amendments to the terms and conditions of issue.

(3) If the Bank notifies existing bondholders of amendments to the terms and conditions of issue not less than one month prior to the date of repayment, the amended terms and conditions of issue shall apply for any renewed term commencing from the date of repayment.

(4) If the Bank fails to notify any amendments to the terms and conditions of issue within the period specified in subsection (3), the existing terms and conditions of issue shall apply for any renewed term commencing from the date of repayment.

5 [Repealed]

6 Prospectus

(1) The Bank shall prior to any issue of Bonds offer them for subscription by way of registered prospectus.

(2) The prospectus shall be registered with the Minister.

(3) The prospectus shall include the terms and conditions of issue specified in Schedule 1 (which shall include any Special Terms approved by Cabinet under clause 10 of Schedule 1).

7 Non-resident withholding tax

(1) Every Non-Resident Bondholder who derives interest on a bond shall be liable to non-resident withholding tax upon that interest at the domestic tax rate for resident companies on the gross amount of interest.

(2) Where the Bank makes an interest payment to a Bondholder under this Act, it shall, at the time of making the payment, make a deduction of non-resident withholding tax therefrom at the rate referred to in subsection (1).

(3) The Bank, upon making a deduction of non-resident withholding tax, shall not later than the 20th day of the month next after the month in which the Bank has made any such deduction, pay to the Treasurer the amount of the deduction.

(4) The Bank shall not later than the 20th day of the month next after the month in which the Bank has made a deduction under subsection (2), deliver to the Treasurer a statement specifying the gross interest payable to the non-resident Bondholder and any deductions made from it.

(5) The interest payable to the non-resident Bondholder by the Bank shall not be included in the return of assessable income of the non-resident Bondholder and the amount of income tax for which the non-resident Bondholder is liable in respect of the amount of the interest derived by the Bondholder in any income year shall be determined exclusively and finally by the total amount of Non- Resident withholding tax for which the Bondholder is liable by virtue of subsection (1).

8 Part of Income Tax

(1) [Spent]

(2) The non-resident withholding tax imposed by section 7 shall be deemed to be a tax on assessable income for the purposes of the Income Tax Act 1961.

9 Jurisdiction

The law of Niue shall apply unless expressly excluded by this Act.

10 Secrecy

(1) Except where the provisions of this Act require, it shall be an offence for any person to divulge or communicate to any other person information relating to the establishment, constitution, business, undertaking or affairs of an applicant or Bondholder.

(2) An offence proved to have been committed under this section shall be liable upon conviction to imprisonment for a term not exceeding 1 year, or to a fine not exceeding 100 penalty units, or both.

(3) Notwithstanding subsection (1), an offence shall not be committed where information is divulged or made available to the extent reasonably required in the circumstances to any foreign Government or any court or tribunal of any country including Niue but only if and to the extent that the Court so directs, having been satisfied that the information is required and will be used solely for the purposes of an investigation or prosecution of any person in relation to the sale, or the laundering of the proceeds of sale, of any prohibited narcotic substances or the laundering of the proceeds gained from any other serious criminal activity, whether that sale or laundering or other serious criminal activity occurred in Niue or elsewhere.

(4) Nothing in this section shall prevent the Court from requiring any person to produce documents or to give evidence in any proceedings of any facts relevant in such proceedings in a court in Niue.

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SCHEDULES

SCHEDULE 1

TERMS AND CONDITIONS OF ISSUE

1 Eligibility

(1) Bonds issued under this Act may be held by –

(a) An individual;

(b) Two or more persons as joint tenants;

(c) Any limited liability company;

(d) Any partnership, special partnership or limited liability partnership;

(e) Any trust or trustee; and

(f) Any other corporate entity.

(2) If at any time a Bondholder is not eligible to hold a Bond the Bank reserves the right to repay any Bonds issued under this Act.

2 Niue Development Bonds

(1) The Bank may issue Bonds in multiples of NZ$500,000 or in such other multiples as Cabinet may approve.

(2) The Bonds will be issued at par.

3 Applications

(1) Any person eligible to hold a Bond may make an application to the Bank in the form specified in Schedule 2.

(2) The Minister may impose a limit upon the value of Bonds that a Bondholder may hold.

(3) Applications lodged after 3pm at any receiving office of the Bank shall be deemed to have been received on the first working day following the date of lodgement.

(4) Applications must be accompanied by the full issue price and must be received prior to the designated Closing Date ("the Closing Date").

(5) The Bank reserves the right to decline any application or applications and to close any or all maturities of Bonds issued pursuant to this Act.

(6) All amounts received prior to the Closing Date will be banked into the Government of Niue’s Consolidated Account for the Applicant’s account until the application is accepted at which time they will be held on the Government of Niue’s account.

(7) Upon acceptance by the Bank of an application the Bank shall issue a Bond Certificate to the Bondholder in the form specified in Schedule 3.

(8) In the event the Issue is over-subscribed the Minister, whose decision shall in all respects be final, will direct the Niue Bank to allocate the Bonds amongst applicants in order of magnitude of subscription amount, after which any unallocated subscriptions will be returned to the applicant, together with interest on it.

4 Registration

(1) The Bank shall keep a Register of all Bonds issued under this Act.

(2) The Register may be kept in book form, or in the form of a paper or card record, or by computer or any device by means of which information is recorded or stored.

If the Register is kept by computer or any such device –

(a) The recording or storing of any information in it shall be deemed to be the entry of it in the Register; and

(b) Any material subsequently derived from information so recorded or stored shall be deemed to be an extract from the Register.

(3) The Bank shall cause to be entered in the Register the following particulars of every Bondholder –

(a) The name and address of the Bondholder;

(b) The amount of Bonds held by the Bondholder;

(c) The rate of interest payable in respect of the Bond;

(d) The date or dates on which the interest is payable;

(e) The due date of repayment of the Bond;

(f) Such other particulars as may be required by the Bank.

(4) Any extract from the Register, certified as correct by an officer of the Bank purporting to act in the course of his duties as such shall, in the absence of evidence to the contrary, for all purposes and in all courts, be sufficient evidence of the entry in the Register to which the extract relates as on the date when the extract was so certified. Any such certificate purporting to have been signed by such an officer shall, in the absence of proof to the contrary, be deemed for all purposes to have been duly signed by such an officer.

(5) The Bank may, on such evidence as appears to it to be sufficient, correct errors and remedy omissions in the Register or any entry in it or in Bond Certificates, and may call in any outstanding bond certificate for that purpose.

(6) Where 2 or more persons are registered as the Bondholders of the same Bond by virtue of any application, memorandum of transfer, or other instrument, then, unless the contrary is expressed in the application, memorandum of transfer, or other instrument, the persons shall be deemed to hold the stock as joint tenants with right of survivorship.

(7) On application by any Bondholder, the Bank shall issue to the applicant a bond certificate certifying that the applicant is the registered Bondholder referred to therein (being the whole or any part of the amount of the Bond of which the Bondholder is the registered holder).

(8) Any bond certificate shall be conclusive evidence of the ownership of the Bond to which it relates by the person named therein as the Bondholder. The Register shall be maintained confidential by the Bank, such that only a registered Bondholder may have access to the Register for the purposes of confirming its position as Bondholder.

(9) Subject to clause 7 the transfer, whether by delivery or otherwise, of any such Bond Certificate shall not operate as a transfer of the legal or equitable interest of the Bondholder to which it relates. The Bank shall not repay nor record any dealing with any Bond for which a bond certificate has been issued, unless the bond certificate has been produced to and cancelled by the Bank.

(10) The Bank shall enter in the Register particulars of the issue of every bond certificate.

(11) Where any bond certificate has been lost, destroyed, mutilated or rendered illegible, the Bank, on receiving evidence to its satisfaction of the loss or destruction or, as the case may be, on the surrender of the mutilated or illegible bond certificate, may, on such terms and subject to such conditions as the Bank prescribes, issue a substitute bond certificate with the word "substitute" stamped or written on it, and shall record the issue of it in the Register.

(12) Every such substitute bond certificate shall have the same effect to all intents and purposes as the original bond certificate for which it is substituted.

5 Term

Bonds shall be issued for a term of one or more years from the date of commencement and, if approved by Cabinet, may be subject to a right of renewal for a further period of one or more years.

6 Interest

(1) Interest shall be payable on the par value of the Bond at the rate specified on it.

(2) Interest is to be calculated from the date of commencement.

(3) Interest will be payable quarterly in arrears, the first interest payment to be made 3 calendar months from the date of commencement and subsequent interest payments to be made at 3 calendar monthly intervals thereafter until maturity.

(4) Interest will be credited without apportionment to the Bondholder’s nominated account at any registered bank or other financial institution in Niue or New Zealand or any other country.

7 Transferability

(1) Each Bond issued will be a negotiable transferable certificate of deposit. A Bondholder may, by memorandum of transfer in the form specified in Schedule 4, transfer the total amount of Bonds held or any part of it to another eligible party.

(2) On production of a duly executed memorandum of transfer, the Bank shall enter in the Register the name of the transferee as the registered Bondholder of the Bond to which the memorandum of transfer relates.

(3) Every such entry shall operate as a transfer of the Bonds to which it relates, and shall vest those Bonds in the transferee.

(4) The Register will close for registration of transfers 10 days prior to each quarterly interest date.

8 Bonds as security

Bonds may be mortgaged, charged, or pledged by the Bondholder.

9 Repayment

(1) Subject to clause 5(2), Bonds will be repaid on the date of repayment.

(2) At the date of repayment, Bondholders will receive the par value of the Bond plus interest on it for 3 calendar month interval preceding the date of repayment.

(3) Repayment shall be made in the method specified for the payment of interest in clause 6(4).

10 Special Terms

Bonds may be issued on such other additional terms as Cabinet may approve.

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SCHEDULE 2

APPLICATION FORM

"Application for Niue Development Bonds"

To Niue Bank
[Address]

A Investor Details

1 Surname First name(s)
(or Company name):

2 Address
(or registered office including contact person)

3 Telephone numbers
Business:
Facsimile:

4 Niue Tax Number

(Note: This will be allocated automatically upon acceptance of the application if the
applicant does not hold a Niue tax number).

I/We/The Company hereby apply (ies) for Niue Development Bonds upon the terms and conditions set out in the Prospectus dated [Prospectus Date].

B Investment Details

1 No. of Bonds applied for:

2 Interest Rate: [Interest Rate] % (Interest rate effective from [Prospectus Date]). Notes: Multiples of NZ$500,000 (or such other multiples as may be approved by Cabinet).

Interest paid quarterly
Special terms of issue

C Payment Authority

1 Name of Bank Account:

2 Country:

3 Bank:

4 Bank Account No:

I/We/The Company hereby authorise(s) the Niue Bank to pay to the above bank account all interest and redemption proceeds which hereafter may become payable in respect of Niue Development Bonds for which the Niue Bank acts as Registrar and to accept their receipt as a full and final discharge, such order to remain in force until revoked by me/ us/the Company in writing.

Signature (signed on behalf of [The Company])

Date:

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SCHEDULE 3

Form of Bond Certificate

Niue Bank
(being duly established under the Niue Bank Act 1994)

Certificate No.

"Certificate for Niue Development Bonds"

Niue Bank
Treasury Department, Alofi, Niue

Niue Development Bonds (hereinafter called "Development Bonds") constituted by this Certificate are issued pursuant to the Niue Development Bonds Act 1994.

Name and Address of Bondholder:

This is to certify that:

1 The Bondholder named in the above table is the registered holder of the principal amount of registered Development Bonds of $500,000 [or such other multiples as Cabinet may approve from time to time] principal amount which is set out in the table below.

2 The Development Bonds comprised in this certificate bear interest at the interest rate set out in the table below and are redeemable at par on the date of maturity set out in the table below.

3 Interest on the development Bonds comprised in this certificate is payable on the Interest Payment Dates set out in the table below and on the Date of Maturity.

NUMBER OF DEVELOPMENT BONDS: (in words and figures)

INTEREST RATE:
INTEREST PAYMENT DATES:
DATE OF MATURITY:
COMMENCEMENT DATE:
SPECIAL TERMS:

CERTIFIED on behalf of the Niue Bank by:

The Minister of Finance for Niue

Director of Niue Bank (appointed pursuant

to section 23(2) (b) of the Niue Bank Act 1994)

NOTES

1 This certificate must be surrendered before any transfer of the whole or any number of the Development Bonds comprised therein can be registered and no other than a multiple of NZ$500,000 [or such other multiples as Cabinet may approve from time to time] principal amount of Development Bonds may be transferred.

2 This certificate must be surrendered before redemption of the principal sum of the Development Bonds comprised herein.

3 A copy of the terms and conditions of issue can be requested from the Niue Bank at any time.

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SCHEDULE 4

Memorandum of Transfer

Niue Bank

"Memorandum of Transfer of Niue Development Bonds"(For use in respect of the transfer of registered Niue Development Bonds)

PART 1
Particulars

Number of Development Bonds (in words and figures)

Certificate No.

Interest Rate:

Date of Maturity:

Particulars of Registered Holder(s):

Surname(s) (First name(s)) Address
(or Company Name) (or Registered Office)

I/We/The Company hereby transfer(s) the Development Bonds described above to the person/s/ company named below.

Signatures of Registered Holder(s) (or on behalf of Company):

PART 2
Particulars of Transferee(s) of Development Bonds

Consideration

Transferee(s)

Surname(s) (First name(s)) Address
(or Company Name) (or Registered Office)

Tax No (if exempt from withholding tax please attach exemption certificates):

I/We/The Company confirm(s) that the Development Bond(s) described above has (have) been acquired on the terms and conditions pursuant to the Niue Development Bonds Act 1994 and I/We/the Company request(s) that such entries be made in the register as are necessary to give effect to this transfer.

PAYMENT AUTHORITY

I/We/The Company hereby authorise the Niue Bank to pay to the bank account below all interest and redemption proceeds which hereafter may become payable in respect of Niue Bonds of which the Niue Bank acts as Registrar and to accept their receipt as a full and sufficient discharge, such order to remain in force until revoked by me/us/the Company in writing.

Name of Bank Account:
Country:
Bank:
Bank Account No:

Signatures of Transferee(s) (or on behalf of the Company);

Date: