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DMO Picks FBNQUEST Merchant Bank For FGN Sukuk II



Following the success of the first Federal Government of Nigeria (FGN) Sukuk Bond in 2017, FBNQuest Merchant Bank Limited has again been appointed as co-financial adviser to the Debt Management Office (DMO) on the issuance of the second N100 billion Sukuk offer.

The Sukuk 2 offer is aimed at consolidating on the gains of the Sukuk 1 by injecting an additional N100billion, which would be directed at funding more infrastructure development projects across the country.

The Sukuk further seeks to diversify the FGN’s source of funding, deepen the market for domestic securities and improve financial inclusion, particularly for ethical investors. The Sukuk II offer would open to the public from December 6, 2018 to December 17, 2018.

The first Sovereign Sukuk bond was debuted by the FGN in September 2017, with FBNQuest Merchant Bank selling over 65 per cent of the total subscriptions to both institutional and retail investors. 

A major benefit of the Sukuk 2 is its low-risk investment profile, as the FGN is fully responsible for the payment of investors’ rental income bi-annually, and the repayment of the principal at maturity.

Also, the rental income is tax-free, encouraging investment amongst the financially excluded as well as a new class of ethically minded investors. The Sukuk 2 is supported by the full faith and credit of the Federal Government of Nigeria, and offers subscribers an opportunity to contribute to the development of road infrastructure in Nigeria. Subscribers can also trade their investments on the Nigerian Stock Exchange (NSE), and FMDQ OTC Securities Exchange.

Speaking on the issuance of the Sukuk II offer, Mr. Taiwo Okeowo, deputy managing director, FBNQuest Merchant Bank Limited said, ‘‘We happy to be participating in this initiative which will contribute to narrowing the country’s infrastructure deficit. With the issuance of the first Sukuk offer, we were able champion a robust investment drive – a demonstration of FBNQuest Merchant Bank’s strong distribution capacity.

“We are especially proud to serve as financial advisers on both of the FGN’s Sukuk offers. We are also happy to be working yet again with the DMO, in support of economic growth and development objectives,” he added.

The Sukuk 2 offer is available to institutional and retail investors. Proceeds from the issuance would be again used to fund construction and rehabilitation of key road projects across the six geopolitical zones of the country to help facilitate the movement of people, goods and services.