Banks, pension managers, others stake N105bn on sukuk bond
The Islamic sukuk bond recently issued by the Federal Government was oversubscribed by more than N5bn, the Debt Management Office said on Tuesday.
The N100bn seven-year sukuk offered by the Federal Government, which closed on Friday, attracted a subscription of N105,878,320,000, according to a statement issued in Abuja by the DMO.
According to the DMO, the project-tied investment facility attracted investors from across a broad spectrum of the public, including pension funds, banks, fund managers and institutional as well as retail investors.
Reacting to the oversubscription, the Director-General, DMO, Ms Patience Oniha, said that the acceptance of the offer was an indication of the viability of the instrument as an investment option as well as a demonstration of utmost faith in the Nigerian economy.
She commended the Federal Government and, in particular, the Minister of Finance, Mrs. Kemi Adeosun, for the policy support that led to the success of the initial offer, which industry watchers accepted as another window that had opened for the government to raise funds to fill the nation’s yawning infrastructure gap.
The DMO said that in the run up to the offer, Nigerians developed tremendous enthusiasm as they embraced the investment instrument advertised nationwide through roadshows by officials from the office; Ministry of Power, Works and Housing; and Central Bank of Nigeria in Lagos, Port Harcourt, Kano, Abuja and Kaduna.
The awareness campaign, which drew attention to the projects the sukuk aimed at, including the construction and rehabilitation of 25 roads across the six geopolitical zones, aroused in the investors the patriotic fervour that led to the oversubscription.
The office said, “Investment experts are optimistic that with this issuance, a new instrument, the sovereign sukuk, has been introduced to Nigeria’s capital market, and has added to the variety of products available for domestic issuers and investors.
“A look at the investors that subscribed for the sovereign sukuk revealed that another significant objective was achieved through the participation of over a thousand retail investors from across the nation who accounted for over four per cent of the total subscription.”
With the oversubscription, the DMO said it had been energised to continue with its role of meeting the government’s funding needs as well as introducing new instruments to develop Nigeria’s capital market.
It is hoped that with the success of the offer and the proceeds from it, the Ministry of Power, Works and Housing will begin work on the road projects in earnest, the DMO added.
The Ministry of Power, Works and Housing had said that it would allocate about N16.7bn from the fund to the construction of roads in each of the six geopolitical zones of the country.