Federal Government of Nigeria seeks to raise N150,000,000,000 to be “used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country”, via a sukuk offer for subscription.
The 7-Year Ijarah sukuk will be due in June 2027, and will be at a rental rate of 11.20% per annum.
According to the FGN 2020 offer for subscription by the Debt Management Office seen by Investogist, the sukuk is being issued by the FGN Roads Sukuk Company 1 Plc, on behalf of the Federal Government of Nigeria, in pursuant to the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004.
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The unit of sale is N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.
The rental payment will be payable half yearly, and the redemption will be by bullet repayment on the date of maturity.
A sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Islamic religious law commonly known as Sharia.
This sukuk present an alternative to Investor’s seeking better returns than the traditional Treasury Bills and FGN Savings bonds, whose yields are very low relative to the 11.2% offered on the sukuk.
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An investment of N10,000.00 entitles the investor a annual rental payment of N1,120.00, by being payable half yearly, the Investor gets paid N560.00 twice in each year, for 7 years. At the end of the 7 years, the N10,000 will be repaid to the Investor.
The opening date for the subscription is May 21, 2020, while the closing date is June 2, 2020. Settlement date is June 9,2020.
The sukuk is backed by the full faith and credit of the Federal Government of Nigeria.
Interested Investors are to contact the financial advisers to the issue; FBNQuest Merchant Bank Ltd and Lotus Financial Services Ltd.
They can also download the application form at the DMO website, or by clicking here.
Written by,
Nnamdi M.
