SAN FRANCISCO, September 07, (THEWILL) – The Debt Management Office (DMO), on Thursday, started a national road show in Lagos in preparation for the issuance of the much awaited N100bn non-interest bearing Sukuk bond.
The DMO, in a statement issued in Abuja, said the road show is to create awareness about the sovereign Sukuk and sensitise target investors about its features and benefits revealing that it would be led by the Director-General, Ms Patience Oniha.
It added that the road show would also be held in Kano, Kaduna and Port Harcourt and that the team would be accompanied by its financial advisers, Lotus Capital Financial Services Ltd. and FBN Merchant Bank Plc.
THEWILL recalls that the DMO had announced its intention to issue a sovereign Sukuk in the domestic market as part of measures to fund the 2017 budget deficit revealing that proceeds from the Sukuk issuance would be used to finance specific road projects.
“Apart from serving as an alternative source of funding for the government, the Sukuk will also serve to diversify the investor base for Federal Government securities, promote financial inclusion and deepen the domestic capital market,” the statement read.
“It is expected that the Sukuk will attract huge subscriptions from a wide range of institutional and retail investors including fund managers, associations and groups.
“The offer for subscription will open in the week after the road-show and will be advertised in major newspapers.
“Sukuk fits into the DMO debt strategy of borrowing to finance capital projects contained in the budget because they are asset-based securities, not debt instruments and represents ownership in a tangible asset, service, project, business or joint venture.
“This ensures that government borrowings are used to finance development projects which have multiple economic and social benefits for citizens.
“The debut sovereign Sukuk is for N100bn with a tenor of seven years and has been certified as ethically compliant by the Financial Regulation Advisory Council of Experts of the Central Bank of Nigeria.”
According to the DMO, to make it accessible to a wide spectrum of Nigerians, the minimum amount that an investor can purchase has been fixed at N10, 000 adding that the benefits to be derived from investment in Sukuk included using the product as collateral to access loans from banks.
Other benefits are safety and regular income which are tax-free and will be listed and traded on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange Plc.
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