The Nigerian Debt Management Office (DMO) has announced an oversubscription of its US$390mn third Sovereign Sukuk bond by 446 per cent, attracting US$1.72bn in total
According to the DMO, the impressive demand for the Sukuk came from a wide range of investors which included ethical funds, insurance companies, fund Sukuk and retail investors among others in line with the objectives of diversifying the investor base for government securities and promoting financial inclusion.
The DMO said that the issuance of the third Sovereign Sukuk, which followed the debut issuance of US$260mn in September 2017 and a second issuance of another US$260mn in December 2018, are project-based and focuses on using borrowed funds to finance infrastructure.
The DMO allotted US$420mn to investors in the third Sovereign Sukuk and the proceeds will be used to finance 44 critical road projects across the six geopolitical zones of Nigeria.
“The benefits from the earlier Sukuk Issuances, which were also used to finance roads, include improved safety on the roads, faster travel times, access to markets for farm produce and opening up parts of the country for development. Other important benefits of using Sukuk to finance road projects are job creation and increased level of activity for service providers, many of whom are small businesses. The DMO expects to continue to raise funds through Sukuk to support improvement in infrastructure and development of the domestic capital market,” stated the DMO.
