By Modupe Gbadeyanka
The sale of the second tranche seven-year N100 billion Islamic bonds has commenced and the Debt Management Office (DMO), which is conducting the exercise on behalf of the Nigerian government, is offering the debt instruments at a rental rate of 15.743 percent.
The Islamic bond, commonly referred to as a Sukuk, is issued by government to use its proceeds to provide critical infrastructural facilities across the six geo-political zones of the country.
In 2017, the federal government issued the first tranche, where it raised N100 billion from the 7-year tenor with proceeds used to finance 25 road projects.
A statement issued by the debt office last week disclosed that the bonds for this year would be due in 2025 with interest paid semi-annually to subscribers.
“Proceeds will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country,” the statement said.
The DMO said it would accept N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.
The debt office said the Sukuk bond qualifies as securities in which trustees can invest under the Trustee Investment Act, as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds, amongst other investors. It is to be listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange and is classified as Liquid Asset by the Central Bank of Nigeria (CBN) and also certified by the Financial Regulatory Advisory Council of Experts (FRACE) of the CBN.
