DMO Lists N162.6bn Sovereign Sukuk on Stock Exchange

By Dipo Olowookere

The N162.557 billion Ijarah Sovreign Sukuk with a 7-year maturity issued by the federal government of Nigeria on June 16, 2020, has been listed on the Nigerian Exchange (NGX) Limited.

The debt instrument, with a rental rate of 11.20 per cent, was brought to the exchange for listing by the Debt Management Office (DMO) on Thursday, March 18, 2021.

“We are excited that the trading of this Sukuk is now permissible having fulfilled the condition for listing stipulated by the Financial Regulatory Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN),” the Director-General of the DMO, Ms Patience Oniha, said about the listing of the bond, the third to be listed.

She further said, “The FGN Sukuk may only be listed for trading on relevant exchanges after the commencement of works on the road project for the construction of the Sukuk assets.

“This is in order to create a pool of assets consisting of non-financial and financial assets that could be freely traded while avoiding the prohibition of dealing in interest-based transactions arising out of the sale of debt and exchange of currency not at par.”

Business Post reports that the Sukuk was sold to investors to finance the rehabilitation and construction of key economic road projects across the six geopolitical zones in the country.

With this listing today, members of the general public who invested in the 2020 Sukuk bonds can now sell their investments and those who wish to invest in Sukuk can now do so on the exchange.

In a statement, the NGX expressed its excitement that its platform can be used to trade the debt instrument among investors.

It said the listing of the Sukuk would provide an exit opportunity for existing investors and further deepen the Nigerian capital market, particularly, the relatively nascent Sukuk market.

The issuance and subsequent listing of the Sovereign Sukuk on the NGX underscore the federal government’s drive for the development of critical infrastructure needed to unlock economic growth, by leveraging innovative and cost-effective financing structures, the statement noted.