DMO offers 10-year N100bn Sukuk for subscription at 15.64% per annum

Abubakar Yunusa Abuja

The Debt Management Office (DMO) has opened an offering for a 10-year N100 billion Forward Ijarah (Lease) Sukuk instrument at a rental rate of 15.64 percent per annum, payable half-yearly.

The offer at N1,000 per unit is subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.

The DMO said this in a statement on Monday. 

The Sukuk is a strategic initiative that supports infrastructure development, promotes financial inclusion and deepens the domestic securities market.

Since the establishment of the initiative in September 2017, Nigeria has issued four Sovereign Sukuk — 2017 (N100 billion), 2018 (N100 billion), 2020 (N162.557 billion) and 2021 (N250 billion). 

According to the statement, the instrument was issued by FG Roads Sukuk Companies 1 Plc on behalf of the federal government.

The DMO said that the proceeds from the offer would be used solely for the construction and rehabilitation of key road projects across the six geopolitical zones.

The offer opens today, November 21 and closes on November 29, with the settlement date being December 2, 2022.

“It qualifies as securities in which trustees can invest under the Trustee Investment Act,” the statement reads. 

“It also qualifies as Government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds, among other investors.”

According to DMO, the Sukuk instrument is to be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited.

“Classified as Liquid Asset by the Central Bank of Nigeria, and certified by the Financial Regulatory Advisory Council of Experts (FRACE) of the Central Bank of Nigeria,” DMO said.

It directed interested investors to contact the issuing houses, including Greenwich Merchant Bank Limited, Vetiva Capital Management Limited and Stanbic IBTC Capital Limited, for the offer.