The Federal government has opened offers for subscriptions for 10 years of Ijarah Sukuk at 15.75 per cent interest per annum due in October 2033.
Sukuk serves as a fixed-income capital market tool, authorised by the Debt Management Office (DMO) on behalf of the federal government, for funding road projects within the nation.
The offer was disclosed in an official announcement from the DMO on Tuesday.
According to the DMO, the subscription period is billed to last for nine days, running from October 3rd to11th with the settlement date being October 13th.
It further stated that the FGN sukuk will mature in October 2033, lasting for ten years as interest will be paid every half year.
“Under the local loans (Registered Stock and Securities) Act, CAP. L17, on the authority of the Federal Government of Nigeria FGN road FGN Road Sukuk Company (FGN RSC 1) offers subscriptions through Greenwich Merchant Bank Limited, Stanbic IBTC Capital Limited, and Vetiva Capital Management Limited are authorized to receive applications for N150,000,000,000.00 10-year Ijarah Sukuk due October 2023. Rental rate 15.75% per annum,” the statement read in part.
Giving details of the Sukuk terms, the DMO said the unit of subscription is N1000 per unit subject to a minimum subscription of N10,000 and in multiples of N1000 thereafter, and that the sukuk is being issued by the FGN road sukuk company on behalf of the Federal Government of Nigeria, with rental payments repayable for half a year, while bullet redemption can be paid on maturity.
The DMO also stated that funds raised from the offer will be used solely for road construction across the six geopolitical zones in the country, and urged interested investors to call their issues houses for further information and advice.