The federal government’s sixth sukuk issuance which ended just last Wednesday received a 435 percent oversubscription, in show of confidence in the instrument and the Nigerian economy, the Debt Management Office (DMO) has announced.
The DMO which issued the sukuk on behalf of the sovereign, said the deal was well received with a total subscription of N652.827 billion as against the N150 billion on offer.
The deal was a 10-year Forward Al Ijarah, at a rental rate of 15.75% and enjoys similar features as the previous five series.
“The N150 billion Sovereign Sukuk whose Offer for Subscription closed on October 11, 2023, was well received with a Total Subscription of N652.827 billion.
“This Subscription Level, which is 435% of the amount offered (N150 billion), shows that the level of awareness of the product has increased and that investors are willing to support the financing of infrastructure,” the DMO said in a mailed noted.
The debt office further noted that in response to this strong demand for the Sukuk, it has already allocated N350 billion to the diverse investors who subscribed to it.
“The N350 billion will be used to finance the construction and rehabilitation of roads and bridges across the six (6) geopolitical zones and the Federal Capital Territory,” the debt off stated, assuring commitment to meeting the needs of investors while also supporting the development of the domestic capital market.
The latest brings the total proceeds generated from federal government’s sukuk issuance so far to over N1 trillion.
A sharia-compliant financial instrument, sukuk was debuted in Nigeria in 2017.
Through the past five series, each in 2017, 2018, 2020, 2021, and 2022, the DMO had so far raised and deployed ₦742.557 billion to the rehabilitation and construction of 4,000 kilometers of road projects and bridges across the six geopolitical zones and the Federal Capital Territory.
Recently, Patience Oniha, Director General of the Debt Management Office (DMO) raised the confidence that the sixth sukuk will be oversubscribed, just like the previous five.
According to her, the federal government issuance continues to raise gains for the investors, federal government and citizens who benefit from those infrastructure built with the proceeds.
She further noted that the I nstrument has remained not just a viable infrastructure funding and investment option in these past years, but has also driven some associated multiplier benefits, including jobs; ethical investments in government securities; higher level of financial inclusion; deepened the domestic financial markets; as well as set benchmarks for corporates and sub nationals.