Uche Usim, Abuja
Investors scrambled for third Sovereign Sukuk offered on behalf of the Federal Government by the Debt Management Office (DMO).
According to the DMO, it offered N150 billion to investors and the offer attracted a very high level of subscription from investors with total subscriptions of N669.124 billion, representing a subscription level of 446%.
The DMO in a statement said: “The impressive demand for the Sukuk came from a wide range of investors which included Ethical Funds, Insurance Companies, Fund Managers and Retail Investors amongst others. This participation by a wide range of investors is in line with the DMO’s objectives of diversifying the investor base for Government Securities and promoting financial inclusion.
“The issuance of the third Sovereign Sukuk, which followed the debut issuance of N100 billion in September 2017 and a second issuance of another N100 billion in
December 2018, is based on the DMO’s commitment to using borrowed funds to finance infrastructure. The Sukuk Issuances are project-tied and are used to finance specific projects which are disclosed to investors.
“The DMO allotted N162.557 billion to investors in the third Sovereign Sukuk. The proceeds of the issuance will be used to finance 44 critical Road Projects across the six geopolitical zones of Nigeria. The benefits from the earlier Sukuk
issuances, which were also used to finance roads, include improved safety on the roads, faster travel times, access to markets for farm produce and opening up parts of the country for development. Other important benefits of using Sukuk
to finance road projects are job creation and increased level of activity for service providers, many of whom are small businesses”.
It added that it would continue to raise funds through Sukuk to support improvement in infrastructure and development of the domestic capital market.