DMO lists N162.5bn Sukuk on NSE, FMDQ

The Debt Management Office (DMO) on Thursday listed its third Sovereign Sukuk, a N162.557 billion seven-year 11.200 per cent Al Ijarah Sukuk, due by 2027 on the Nigerian Stock Exchange (NSE) and the FMDQ Securities Exchange.

In a statement by the DMO, the Sukuk which at the time of issuance, was massively subscribed to the tune of N669.124 billion (or 446 per cent), was issued to finance 44 economic road projects across the six geopolitical zones.

The agency added that with the listing, investors who are already holding the Sukuk can trade them while new investors have an opportunity to buy the Sukuk in the secondary market.

The DMO started the issuance of Sovereign Sukuk in September 2017 as one of the measures towards attaining its strategic objective of bridging the infrastructure gap in Nigeria to promote job creation and economic growth.

‘Following the successful issuance of the N100 billion debut Sukuk in 2017, the DMO issued another N100 billion Sukuk in 2018. The proceeds of the two Sukuks were deployed to the rehabilitation and reconstruction of road projects across Nigeria.

‘Through the Sovereign Sukuk initiative, the DMO has raised a total sum of N362.57 billion in less than three years for the rehabilitation and construction of major economic roads across the country.

‘In addition, by issuing Sovereign Sukuk, the product range available to investors in the domestic financial market has increased, while several retail investors have been attracted to the financial markets.

‘The DMO remains committed 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,’ it explained in a statement.

A Sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Islamic religious law commonly known as Sharia. The issuer must also make a contractual promise to buy back the bond at a future date at par value.

The main difference between bonds and Sukuks is that while bonds are financial certificates through which investors lend money to the issuer, indicating an obligation for repayment at maturity, Sukuk holders receive a share of the profit generated by the underlying asset.

Bondholders receive regular interest payments.