Nigeria’s first N100bn Sukuk bond to mature in September

Nigeria’s first N100bn Sukuk bond to mature in September

Nigeria’s first Sukuk bond of N100 billion, which was issued on September 26, 2017, is set to mature on September 26, 2024.

This is according to the 2023 Annual Activity Report of the Financial Markets Department of the Central Bank of Nigeria (CBN).

However, Nigeria has been paying rentals at a rate of 16.47% on this bond every March 26 and September 26 as a form of debt service before its maturity date.

According to the Securities and Exchange Commission (SEC) in Nigeria, Sukuk is an Arabic word, which refers to investment certificates or notes that evidence proportionate interest in ownership of tangible assets, usufructs and services or investment in the assets of particular projects or special investment activity that adhere to the principles of Shariah. Sukuk is a hybrid instrument in that it combines both equity (shares in ownership of underlying asset/project) and debt features (fixed periodic payments/coupon payments).

About the Sukuk bond

Following the auction of the bond in 2017, the Debt Management Office (DMO) announced that its offer for the N100 billion 7-year debut Sukuk Offer was oversubscribed.

Investors across a broad spectrum comprising pension funds, banks, fund managers, and institutional and retailiInvestors subscribed to the offer.

The offer attracted a total subscription of N105.878 billion. However, only N100 billion, the exact amount offered, was allotted.

Over 1000 retail investors from across the nation accounted for over 4% of the total subscription, according to the agency in charge of the country’s debt.

The DMO indicated that funds would be utilised for the construction and rehabilitation of 25 roads across the six geopolitical zones.

A part of the funds raised was used for the Abuja-Abaji-Lokoja Road, the Obajana-Okene Road, the Suleja-Minna Road and the Kaduna Eastern Bypass Road.