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FG issues another N100bn Sukkuk bond

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FG issues another N100bn Sukkuk bond

The Federal Government, Thursday, issued another N100bn seven-year Sukuk.

The new Sukkuk bond will be due in 2025, according to a statement published on the website of the Debt Management Office (DMO).

The new Sukkuk has a rental rate of 15.743 per cent and is expected to open on December 6, 2018 and close on December 17, while the settlement date for the bond is December 18, 2018.

“The proceeds will be used solely for the construction and rehabilitation of key roads across the six geopolitical zones of the country,” the DMO added.

The projects the bond would be used for, according to DMO, are the reconstruction of Bida-Lambatta road in Niger State; the rehabilitation of Gwoza-Damboa-Goniri-Ngamdu road in Yobe/Borno states; and the construction of Ikom Bridge in Cross River State.

It noted that the instrument type is Ijarah (Lease) Sukuk, and the issuer is FGN Roads Sukuk Company 1 Plc on behalf of the Federal Government of Nigeria.

The DMO further stated that the unit of sale is N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.

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The rental payment is payable half yearly, with a redemption bullet repayment on the date of maturity.

The DMO, which said the Sukuk was backed by the full faith and credit of the Federal Government of Nigeria, it is an investment that represents the ownership interest of the holder in an asset or pool of assets. The certificate entitles the holder to receive income from the use of the assets.

The DMO further noted that the Federal Government issued Sukuk to fund the construction/rehabilitation of key economic infrastructure projects across Nigeria such as roads, to diversity the sources of government funding, and to offer investors an opportunity to invest in government-issued securities.

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