Fixed Income

Nigerian Exchange Admits DMO’s N162.557bn, 7-year Sovereign Sukuk For Trading

The Nigerian Exchange Limited (NGX), on Thursday, March 18, 2021, said it has admitted the Federal Government’s N162.557bn, seven-year, Sovereign Sukuk issued on June 16, last year, onto its trading platform.

FGN Ijarah Sukuk, the third in the series, which has a rental rate of 11.20% will finance the rehabilitation and construction of key economic road projects across the six geopolitical zones in the country, according to the Debt Management Office (DMO).

The listing enables members of the general public who invested in the 2020 Sukuk bonds to sell their holding in part of whole, a situation that would enable new investors interested in the Sukuk take position.

Commenting on the listing, the Director-General, DMO, Ms. Patience Oniha expressed delight “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).”

Caption: 2020 SUKUK: Ongoing reconstruction of Section 1- Amansea to Enugu border on the Onitsha-Enugu Expressway, Enugu State. Contractor: RCC Nigeria Ltd. Source: @trafficbutter via @TrackaNG

According to Oniha, “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 sale of debt and exchange of currency not at par.”

The listing, the NGX Limited reiterated “will provide exit opportunity for existing investors and further deepen the Nigerian capital market, particularly, the relatively nascent Sukuk market.”

Caption: 2020 SUKUK:  Dualisation of Ibadan-Ilorin Expressway: Section II – Oyo-Ogbomoso Road, Oyo State. Contractor: RCC Nigeria Ltd Payment. Source: @trafficbutter via @TrackaNG

The issuance and subsequent listing of the Sovereign Sukuk, it added, “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 Exchange continues to deliver on its commitment to provide a platform for issuers and investors to meet their investment objectives. By enhancing access to the Federal Government and the private sector, NGX has promoted and supported the growth of the debt market in Nigeria with listings worth over N2.6Tn in 2020,” the statement added.

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