DMO Lists N162.55bn FGN Sukuk Bond with 7-year tenor and 11.2% rate on the NSE and FMDQ Exchanges

Following the release of its FGN Bonds offer circular for the month of March 2021 on Wednesday, the debt management office (DMO) has announced the listing of the FGN Roads Third Sovereign Sukuk ‘N162,557,000,000 Al Ijarah Sovereign Sukuk due 2027’ for a 7-year tenor at 11.200 per cent rental rate on the Nigerian Stock Exchange and FMDQ Securities Exchange. The DMO in a disclosure on Thursday on the NSE revealed.

The disclosure from the DMO further revealed that the Sukuk Bond at the time of issuance was massively subscribed to in the tune of N669.124 billion or 446 per cent, and was issued to finance 44 economic road projects across the six (6) geopolitical zones. It further revealed that with the listing on the two exchanges, investors who are already holding the SUKUK can trade them while new investors have an opportunity to buy the SUKUK in the secondary market.

According to the DMO, it began issuing sovereign Sukuk in September 2017 as a measure towards the attainment of the strategic objective of bringing the infrastructure gap in Nigeria to promote job creation and economic growth. Consequently, following the success achieved in the issuance of N100 billion debut Sukuk in 2017, the debt office issued another N100 billion Sukuk the following year. Proceeds from the two issues were deployed into the rehabilitation and reconstruction of road projects across Nigeria.

Progressively, the DMO has raised a total of N362.57 billion in less than 36 months through the sovereign Sukuk for the rehabilitation and construction of major economic roads across the country. Also, by Sovereign Sukuk Issuance, the product range available to investors in the domestic financial market has increased, while, several retail investors have been attracted to the financial markets.

Meanwhile, the 3rd Sovereign Sukuk was issued in June 2020, to finance the rehabilitation & construction of key economic road projects across the country and is due 2027 at a return of 11.200 per cent with the code FGSUK2027S3. It can be subscribed to with a minimum of N10,000 and can be purchased at N1000 per unit at a rental rate of 11.200 per cent. The disclosure from the DMO also stated that the date for the maturity is 16 June 2027 (7-year tenor) with the last day of the rental period scheduled for 16 June and 16 December of each year, signifying twice a year payment.

The DMO has reiterated its commitments to providing funding for the Government, as approved from time to time, to finance the development of infrastructure whilst also deepening the domestic financial markets and mobilizing savings.

This information was contained in the disclosure signed by Godstime Iwenekhai, who is Head, Listings Regulation Department at the Nigerian Stock Exchange.