Investors bid N652bn for N150bn Sukuk bond
By Patience Ikpeme
The Sukuk bond offering recently taken to the market by the Nigerian government has been oversubscribed by a significant amount.
The government initially offered N150 billion worth of Sukuk bonds, but the subscription exceeded this amount by 435%, meaning that investors have submitted bids for a total of N652.827 billion worth of bonds.
The Debt Management Office (DMO) has stated that this oversubscription indicates a high level of awareness and interest in the product, showing that investors are willing to support the financing of infrastructure projects in Nigeria.
As a result of the strong demand, the DMO has decided to allocate N350 billion worth of Sukuk bonds to the subscribing investors.
the DMO has made a decision to distribute or allocate Sukuk bonds worth a total of N350 billion to investors who have expressed their willingness to subscribe or purchase those bonds. Essentially, the DMO is satisfying the demand for Sukuk bonds by making them available to investors in the specified amount.
The proceeds from the Sukuk bond offering will be used to fund the construction and rehabilitation of roads and bridges across Nigeria’s six geopolitical zones and the Federal Capital Territory.
The Director-General of the DMO, Ms. Patience Oniha, had predicted the oversubscription of the bond offering. She also mentioned that any additional funds raised through the Sukuk bond offering will be used for other available projects.
Specifically, the funds raised from the Sukuk bond offering will go towards financing 53 different road projects, totaling over 3,000km in length. Tolls collected from these roads will be used to repay the Sukuk loan, ensuring that the investors receive their expected returns on the bonds.
