Yemisi Izuora
Federal Government’s second N100 billion 7-Year Sukuk was Tuesday listed on the Nigerian Stock Exchange, NSE, by the Debt Management Office (DMO).
The fund will mature in 2025. The Sukuk was raised at a rental rate of 15.743 per cent, a 73-basis point discount from the 16.47 per cent rental rate of the maiden issuance listed in April 2018.
Sukuk bonds are structured to generate returns to ethical investors without infringing on the Islamic principles which forbid interest payments. It represents an ownership interest in the asset to be financed rather than in a debt obligation.
According to DMO, the aim of the FGN Sukuk is to promote financial inclusion and deepen of the investor base for FGN securities. It will be deployed to financing infrastructure, in keeping with the Government’s commitment to bridging the infrastructural gap across the country.
Commenting on the Listing, Head, Trading Business Division, NSE, Mr. Jude Chiemeka said, “At the Exchange, we believe enhancing access to capital for the Federal Government and the private sector is key to national economic growth. This is the motivation behind our commitment to promote and support the growth of the debt market in Nigeria. Our efforts are geared towards expanding the NSE’s position as the multi-asset hub, creating ample possibilities for our key stakeholders, while delivering a transparent and liquid market to investors”.
The emerging and frontier markets can expect greater traction in their quest to continually unlock dormant pools of capital. This listing is particularly important in scaling development for these economies characterized by daunting growth in infrastructure and also have a strong bias for Islamic Finance”.