DMO Lists FGN Sukuk Bond on FMDQ, Nigerian Stock Exchange
The Debt Management Office (DMO) has listed the first the N100 billion Federal Roads Sukuk due 2024 on the FMDQ OTC Securities Exchange and the Nigerian Stock Exchange (NSE).
Sukuk are bonds structured to generate returns to ethical investors without infringing on the Islamic law which forbids interest payments. It represents an ownership interest in the asset to be financed rather than a debt obligation.
The 7-year, Federal Government Ijarah Sukuk has a rental rate of 16.47 per cent.
Speaking on the development, Director-General of the DMO, Ms. Patience Oniha, said: “The purpose of the Sukuk is to integrate ethical investors into the domestic securities market, establish benchmark for pricing of Sukuk by other domestic issuers and offer investors the opportunity to earn returns while contributing to the infrastructure development of the country. The proceeds are being deployed for the construction and rehabilitation of twenty-five key economic roads projects across Nigeria’s six geopolitical zones. The listing of the sovereign Sukuk will provide investors with the much needed transparent and efficient platform for price determination and liquidity.”
Senior Vice President, Economic Development Division, FMDQ, Mr. Emmanuel Etaderhi congratulated the issuer and co-sponsors to the issue, stating that the issuance will further deepen the domestic DCM and increase the range of investible debt securities in the markets, invariably contributing to the development of the nation.
According to him, listing the Sukuk on FMDQ would rightly position the nation to continue to maximise its potential via the Nigerian DCM. He reiterated the OTC Exchange’s commitment to continue to support the initiatives of the DMO towards the development of a highly liquid, deep and well-developed DCM in Nigeria.
On his part, the Chief Executive Officer of NSE, Mr.Oscar Onyema said:”This listing lends credence to our commitment to championing and advocating for the growth of our debt capital market. It is a further affirmation of our unique platform to help both the Federal Government and businesses access capital. With a diversified investor base, our market offers issuers and their products access to capital and visibility, while delivering a transparent and liquid market to investors.”
He stressed that listing has strong implications for emerging and frontier markets which continually seek to unlock dormant pools of capital needed for economic growth and development, particularly as these economies have larger infrastructural deficits and relatively stronger demographics in favour of Islamic Finance, than developed markets.”