Debt Management Office (DMO) Nigeria, has listed the second ₦100 billion, seven-Year, FGN Sukuk due to mature in 2025, on the Nigerian Stock Exchange (NSE) platform.
The Sukuk was raised at a rental rate of 15.743 per cent, a 73-basis point discount from the 16.47 per cent rental rate of the maiden issuance listed in April 2018.
Sukuk bonds are structured to generate returns to ethical investors without infringing on the Islamic principles, which forbid interest payments. It represents an ownership interest in the asset to be financed rather than in a debt obligation.
According to DMO, the aim of the FGN Sukuk is to promote financial inclusion and deepen of the investor base for FGN securities. It will be deployed to financing infrastructure, in keeping with the Government’s commitment to bridging the infrastructural gap across the country.
The Head, Trading Business Division, NSE, Jude Chiemeka, said: “At the Exchange, we believe enhancing access to capital for the Federal Government and the private sector is key to national economic growth.
This is the motivation behind our commitment to promote and support the growth of the debt market in Nigeria. Our efforts are geared towards expanding the NSE’s position as the multi-asset hub, creating ample possibilities for our key stakeholders, while delivering a transparent and liquid market to investors.
“The emerging and frontier markets can expect greater traction in their quest to continually unlock dormant pools of capital. This listing is particularly important in scaling development for these economies characterised by daunting growth in infrastructure, and also has a strong bias for Islamic Finance.”
Recall that the Director-General, DMO, Ms. Patience Oniha, at the listing of the first tranche of the instrument on FMDQ OTC Securities Exchange platform in Lagos, last year, had said the bond would boost business activities and enhance the quality of life in the country.
“The DMO in pursuit of its objectives to diversify the sources of government funding and deepen the domestic capital market, successfully issued the debut N100 billion 7-Year Sovereign Sukuk on Sept. 26, 2017.
According to her, the sukuk would integrate ethical investors into the domestic securities market. and help establish a benchmark for pricing of a similar bond by other domestic issuers.
The Senior Vice President, Economic Development Division, FMDQ, Emmanuel Etaderhi, congratulated the issuer and co-sponsors to the issue, stating that the issuance would further deepen the domestic Debt Capital Market (DCM).
He pointed out that the issue would increase the range of investible debt securities in the markets, thereby contributing to the development, adding that listing of the Sukuk on FMDQ would position the nation to continue to maximise its potential through the debt market.