In a show of confidence and soaring appetite for Nigeria’s sovereign securities, investors oversubscribed the second tranche of the Federal Government’s N100 billion Sukuk bond that closed last week Monday, by N32 billion.
The Debt Management Office (DMO), which gave the update at the weekend, said it received subscriptions of over N132 billion from 2073 investors for the public offering.
The bond, which opened December 6, 2018, is a 7-year 15.743% Sovereign Sukuk due 2025.
The DMO had said earlier that the proceeds would be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country.
Specifically, the proceeds of the road projects are being planned to fund the reconstruction of Bida-Lambatta road in Niger State; the rehabilitation of Gwoza-Damboa-Goniri-Ngamdu road in Yobe/Borno states, and the construction of Ikom Bridge in Cross River State, among others.
“The high success rate of the Sukuk, which is the second by the Federal Government of Nigeria, showed investors’ appetite for FGN Securities and also their interest in the fact that the proceeds will be used to improve the state of road infrastructure in the country,” the DMO said in a mailed statement announcing the outcomes of the deal.
It noted that the Federal Government issued Sukuk to fund the construction/rehabilitation of key economic infrastructure projects across Nigeria such as roads, to diversity the sources of government funding, and to offer investors an opportunity to invest in government-issued securities.
Nigeria’s Federal Government issued the first tranche of N100 billion Sukuk to fund the construction/rehabilitation of key economic infrastructure projects across Nigeria such as roads, diversity the sources of government funding, and to offer investors an opportunity to invest in government-issued securities.
Patience Oniha, director-general, DMO, had severally explained that apart from the direct infrastructure benefits, the federal Sukuk was also useful to achieve a higher level of financial inclusion and to serve as a reference for pricing Sukuk issued by other bodies, especially private sector issuers.
Ahead of the second tranche issuance, Oniha had galvanised retail investors to fully embrace the offer and subscribe.