Sukuk Bond
DMO: Nigerian roads financed with Sukuk not repaying debt as planned
File Photo The Debt Management Office (DMO) has decried the country’s debt service to revenue ratio, describing it as a major issue of concern. Patience Oniha, the Director-General of DMO, said this in Abuja on Thursday at the fifth Budget Seminar (webinar) organised by the Securities and Exchange Commission (SEC). The theme of the budget seminar was, “Financing Nigeria’s Budget and Infrastructure Deficit through the Capital Market.” Oniha stressed the need for infrastructure built with borrowed funds to generate revenue to service the debts. According to her, “We have done the Sukuk, for instance, but the government is the one servicing the debt of those Sukuk. “They (the debts) are not being serviced with revenue from those sources (infrastructure). “I think that when we are talking abou...
Indebted Eskom Turns to Sukuk Market for Funding
Sourced from REVE South Africa’s embattled national power utility Eskom has new plans to issue a $58 million (R1 billion) sukuk bond in a bid to diversify funding sources as borrowing costs rise. According to spokesperson Sikonathi Mantshantsha, Eskom has appointed a new lead arranger “to work towards establishing timelines for the issue.” The power utility currently has over R450 billion in debt and has yet to announce further plans to ask the South African governments for additional capital injections. What is a sukuk? According to IOL, a sukuk is a Shariah-compliant investment and an attractive alternative to conventional bonds. For all intents and purposes a sukuk – Arabic for ‘investment certificate’ – is issued for the purpose of raising money for utilisation within a corporation or ...
Nigeria begins sale of N150 billion sovereign Sukuk at 11.2 percent
The Federal Government on Thursday began the sale of its third tranche 7-year N150 billion Sovereign Sukuk, the Debt Management Office (DMO) said. The offer circular, which was obtained from its website, said the seven year Islamic Sukuk, referred to as Ijarah, was at a rental rate of 11.2 per cent and would be due in June 2027. The bond, which was aimed at funding key road infrastructure across the six geo-political zones, was payable semi-annually. Subscription for the bond, guaranteed by the government, would close on June 2. The circular said subscribers could purchase N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter with First Bank and Islamic wealth manager, Lotus Capital managing the sale. The DMO said it qualified as securities in w...
