The Debt Management Office on Thursday started a national road show in Lagos in preparation for the issuance of the much awaited N100 billion non-interest bearing Sukuk bond.
The road show which was led by the debt office’s Director-General, Patience Oniha, would also be held in Kano, Kaduna and Port Harcourt.
The DMO in a statement said the team would be accompanied by its financial advisers, Lotus Capital Financial Services Ltd., and FBN Merchant Bank Plc.
The road show is to create awareness about the sovereign Sukuk and sensitise target investors about its features and benefits.
DMO had announced its intention to issue a sovereign Sukuk in the domestic market as part of measures to fund the 2017 budget deficit.
“Apart from serving as alternative source of funding for the government, the Sukuk will also serve to diversify the investor base for federal government securities, promote financial inclusion and deepen the domestic capital market.
“It is expected that the Sukuk will attract huge subscriptions from a wide range of institutional and retail investors including fund managers, associations and groups.
“The offer for subscription will open in the week after the road-show and will be advertised in major newspapers,” the DMO statement read.
According to the DMO, to make it accessible to a wide spectrum of Nigerians, the minimum amount that an investor can purchase has been fixed at N10, 000 only.
The DMO said that proceeds from the Sukuk issuance would be used to finance specific road projects.
It said “Sukuk fits into the DMO debt strategy of borrowing to finance capital projects contained in the budget because they are asset-based securities not debt instruments and represents ownership in a tangible asset, service, project, business or joint venture.
“This ensures that government borrowings are used to finance development projects which have multiple economic and social benefits for citizens.
“The debut sovereign Sukuk is for N100 billion with a tenor of seven years and has been certified as ethically compliant by the Financial Regulation Advisory Council of Experts of the Central Bank of Nigeria.”
The DMO said the benefits to be derived from investment in Sukuk included using the product as collateral to access loans from banks.
Other benefits are safety and regular income which are tax free and will be listed and traded on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange Plc.