The Federal Government on Tuesday launched a N150 billion Sukuk issuance to raise funds for the construction and rehabilitation of roads and bridges across the country.
The Debt Management Office (DMO) yesterday opened application list for subscription to the N150 billion Ijarah Sukuk.
Sukuk is a non-interest, asset-backed instrument, based on the principles of Islamic finance.
According to a statement by the DMO, the Sukuk is issued by Federal Government of Nigeria (FGN) Roads Sukuk Company PLC, on behalf of the Federal Government.
It said the Sukuk were offered at N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.
“Rental payment is made half-yearly, and bullet repayment is done on the date of maturity.
“Proceeds will be used solely for the construction and rehabilitation of key road projects and bridges across the six geopolitical zones of the country,” the DMO said.
It added that the Ijarah Sukuk was backed by the faith and credit of the Federal Government.
“It qualifies as securities in which trustees can invest under the Trustee Investment Act.
“Qualifies as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors.
“To be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited,” it said.
It added that the Ijarah Sukuk was classified as liquid asset by the Central Bank of Nigeria (CBN) and certified by the Financial Regulation Advisory Council of Experts of the CBN.
News Agency of Nigeria (NAN) reports that the Sukuk is a Sharia-compliant instrument that represents the interests of the owner in an asset or pool of assets.
It ensures that every financial activity is backed by real economic activity, is usually linked to specific infrastructure projects.
