FIRST Investments is set to pay a dividend on its suspended $1 billion bond fund but it is unable to say when the suspension will be lifted. The six-week suspension decision was forced on the Leveraged United States Government Bond Fund, which invests in collateralised mortgages - complex securities based on packages of home mortgages - by the danger of investors being forced to redeem holdings at unrealistic prices. In spite of this, directors of the fund are expected to recommend its first dividend of 20 US cents to be paid on June 30. About 80 per cent of investors are based in Hong Kong. Managing Director Geoffrey Mansfield said the fund's 1,100 investors had been supportive. ''No one wants a suspended fund but it does not make sense to open it if the market is illiquid,'' he said. The company announced the suspension on April 13 after lenders to a New York-based fund management company Askin Capital Management dumped more than $9 billion worth of this type of securities on to the market and boosted daily market volumes 15-fold, resulting in a fivefold widening of the bid-offer spread to 30 per cent. The value of the Leveraged US Government Bond Fund fell 14.3 per cent. Neither First Investments nor the bond fund have any association with Askin Capital. Mr Mansfield said: ''We would still be entering a market where the only sellers are forced sellers. It would not be responsible to shareholders.''