FG launches pre-offer roadshow for N100bn Sukuk

Debt Management Office (DMO) will today kick off activities preparatory to the Issuance of the much-awaited N100 billion non-interest-bearing bond popularly called Sukuk.

A national roadshow led by the Director-General of the DMO, Ms. Patience Oniha, would visit major cities in Nigeria including, Kano, Kaduna, Lagos and Port Harcourt.

The team would be accompanied by its Financial Advisers, Lotus Capital Financial Services Limited and FBN Merchant Bank Plc, on the show to create awareness about the Sovereign Sukuk and sensitise target investors about the features and benefits of the Sovereign Sukuk.

DMO had announced its intention to issue a Sovereign Sukuk in the domestic market as part of measures to fund the 2017 budget deficit as well as diversify the investor base for FGN Securities, promote financial inclusion and deepen the domestic capital market.

Proceeds from the Sukuk Issuance, according to the DMO, would be used to finance specific road projects.

Blueprint checks revealed that Sukuk are asset-based securities, not debt instruments, and represents ownership in a tangible asset, service, project, business or joint venture.

“This is why Sukuk fits into the DMO debt strategy of borrowing to finance capital projects contained in the budget as well as to ensure that government borrowings are used to finance development projects which have multiple economic and social benefits for citizens.

“The debut Sovereign Sukuk is for N100 billion 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.”

Benefits to be derived from investment in the Sukuk, according to the DMO, include “safety, regular income which are tax free and liquidity as they will be listed and traded on The Nigerian Stock Exchange and the FMDQ OTC Securities Exchange Plc.”

The product is also useful as collateral to access loans from banks and the offer for subscription would open in the week after the roadshow, however, to make it accessible to a wide spectrum of Nigerians, the minimum amount that an investor can purchase has been fixed at N10,000, just as potential investors are advised to visit www.dmo.gov.ng

 

 

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