Debt Management Offices says it plans to sell a N100 billion sovereign (sukuk) non interest bond in Nigeria market this month to help fund road projects.
The non interest bond with a 7-year tenor will go on sale on June 28 for three days via book building, the DMO said. The bond will be tradable on the Nigerian Stock Exchange and on FMDQ over-the-counter platform.
The DMO said the issue was “part of the plan to fast track the development of infrastructure and engage in … project-tied capital raising.” It said Nigeria has challenges with road, railway and power infrastructures.
In 2013, Osun State issued N10 billion worth of non interest bond, but no other such transaction followed.
The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for corporates to follow, the debt office said.
The planned sukuk issue will target retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.
Nigeria plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by lower oil prices which have slashed government revenues and weakened the naira .
