The Debt Management Office (DMO) has announced its readiness to issue another Sovereign Sukuk this year for an expected amount of N200 – N250 billion.
The debt office said it is for the financing of critical road projects across the country.
The DMO is to issue the Sukuk bond on behalf of the federal government to raise revenue for specific projects. The debt office made the announcement in a statement that was issued yesterday.
The DMO commenced the issuance of Sukuk in September 2017 as a strategic initiative to support the development of infrastructure, promote financial inclusion and deepen the domestic securities market.
Subsequent to the debut of Sovereign Sukuk in 2017, in which N100 billion was raised to finance the rehabilitation and construction of 25 road projects across the nation’s six geopolitical zones, the DMO issued a Sukuk for N100 billion in 2018 and another for N162.557 billion in 2020.
The proceeds of these two Sukuk issuances were deployed to 28 and 44 road projects in the six geopolitical zones. In summary, a total of N362.577 billion Sovereign Sukuk was issued between September 2017 and June 2021.
Since the debut Sovereign Sukuk in September 2017 which benefits in terms of improved road infrastructure within and outside cities in Nigeria, the Sukuk has been commended as a viable instrument for financing infrastructure.
“The use of Sukuk has enabled timely completion of the designated projects whilst also delivering the multiplier effects associated with construction of capital projects such as roads,” the DMO said, adding that it has already appointed transaction parties through the open competitive bidding process for the issuance of the fourth Sovereign Sukuk.
Details of the process showed that Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited and Vetiva Capital Management Limited will serve as issuing houses.
BURAQ Capital Limited is financial adviser while FBNQuest Trustees Limited and APEL Capital & Trust Limited are trustees, with Abdulai, Taiwo & Co. Solicitors and Tsedaqah Attorneys serving as legal advisers.
The DMO expects a high subscription level for the Sukuk when the Offer opens.