Tayo Busayo – The Debt Management Office (DMO) has offered N100 billion “Ijarah Sukuk’’ bonds for subscription at N1,000 per unit, on behalf of the Federal Government.
According to the DMO, the offer is of a 10-year tenor, due for maturity in December 2032, adding that the proceeds would be invested solely in the construction and rehabilitation of certain strategic roads across the country.
The bonds are issued by FGN Roads Sukuk Company1 PLC., through Greenwich Merchant Bank Ltd., Stanbic IBTC Capital Ltd. and Vetiva Capital Management Ltd.
“Date of offer is Nov. 21; closing date is Nov. 29, while settlement date is Dec. 2, 2032.
“It is offered at N1,000 per unit subject to a minimum subscription of 10,000 units and in multiples of 1,000 thereafter.
“Rental payment is made half-yearly while bullet payment (principal sum) will be made on the date of maturity.
“Proceeds will be used solely for the construction and rehabilitation of key road projects across the six geopolitical zones of the country”, the DMO stated, adding that the Ijarah Sukuk bond is backed by the full faith and credit of the Federal Government.
“It qualifies as securities in which trustees can invest under the Trustee Investment Act.
“It also qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act and for tax exemption for pension funds administrators amongst other investors.
“It will be listed on the Nigerian Exchange Ltd. and the FMDQ Securities Exchange Ltd.
“It is classified as liquid asset by the CBN and certified by the Financial Regulations Advisory Council of Experts also of the CBN”, the DMO said.
The Ijarah Sukuk, bond like the FGN bonds and FGN savings bonds, constitute part of the domestic component of government borrowings.
Since it was introduced in 2017, it has provided N612,557 billion for the Federal Government, which has helped in funding 71 roads and six bridges measuring 1,881 kilometres across the country.
Sukuk bond was last issued in December. 2021.