As the Federal government of Nigeria commences the sale of another tranche of N150 billion SUKUK Bonds, we provide you with a detailed overview of the bond and how you can invest. The proceed of the Sukuk bonds, according to the government will solely be used for the construction and rehabilitation of key roads across the six geopolitical zones of the country.
WHAT IS SUKUK?
Sukuk is an investment certificate 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. What it implies is that the issuer of the Sukuk bond (FG) sells an investor group a certificate, and then uses the proceeds of the bond to purchase an asset (In Nigeria case, road construction & rehabilitation) of which the investor group has partial ownership. The issuer (FG) must also make a contractual promise to buy back the bond at a future date.
DIFFERENCE BETWEEN SUKUK BONDS & CONVENTIONAL BONDS
|SUKUK BONDS||CONVENTIONAL BONDS|
|Represent ownership interest in assets||Bonds represent a pure debt obligation due|
from the issuer.
|The funds raised from Sukuk issuance must be used only for ethical purposes||Bonds can issued to finance any legal|
|The sale of Sukuk represents the sale|
of the holder’s interest in an asset
|The sale of a Bond is the sale of a debt.|
|Rental income is paid on assets||Interest is paid|
BENEFITS OF INVESTING IN SUKUK BONDS
• Regular cash flow. as Rental Income will be paid half-yearly to Sukuk Holders.
• Rental Income is Tax-free
• Safe and risk-free investment as they are a direct obligation of the Federal Government of Nigeria and backed by the full faith of the FGN
• Good security for diversification of asset portfolio
• Acceptable as collateral for borrowing from banks and other financial
• Classified as Liquid Asset by the Central Bank of Nigeria.
• To be listed and traded on The Nigerian Stock Exchange and the Financial
Market Dealers Quotation OTC Securities Exchange. thereby providing
opportunities for Sukuk holders to buy or sell on any business day.
• Good investment opportunity for ethical investors
HOW TO INVEST IN NIGERIA GOVERNMENT N150BN SUKUK BONDS
– Retail investors
– High net worth individuals
– Institutional investors such as commercial banks. insurance/takaful
companies. pension funds. asset managers. private banks and others
– Ethically inclined investors
– Cooperative Societies. Religious bodies. state investment companies
UNITS OF SALE: N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.
1. Visit the offices of our Financial Advisers to obtain the prospectus
and Application Form or Click Here to Download
2 If you do not have a Custodian Account or an account with the Central
Securities Clearing System (CSCS), you may approach a licensed
to open one.
3. Pay for the number Of units you wish to purchase
4. Submit completed Application Form and proof of payment to any of the Financial Advisers – Lotus Financial Services Ltd or FBN Merchant dank Ltd either email ([email protected] or [email protected]) or physically at any of their offices. You can also submit completed forms to any of the Placement Agents
DEADLINE: 2 JUNE 2020
FAQ (Frequently Ask Question) About SUKUK Bonds
CAN I SELL THE SUKUK CERTIFICATE IN THE SECONDARY MARKET?
Yes Trading will be done on the secondary market by licensed dealers on the
floor of The Nigerian Stock Exchange and on the FMDQ OTC Securities Exchange. in accordance with the Prospectus.
WHAT WILL I GET AS PROOF OF MY INVESTMENT?
Your Custodian/CSCS account will be credited with the Sukuk units allotted to you and you will duly be notified Of the credit through SMS/Email.
IS MY INVESTMENT IN THE SUKUK SAFE?
Yes. the Sukuk is backed by the full faith and of the Federal Government of
HOW WILL I GET RETURNS FROM MY INVESTMENT?
• Returns due to you will be credited twice a year to the bank account you provided on the Application Form
• At maturity. your principal investment will also be credited to your bank account
WHAT CAN I DO IF I DONT WANT TO HOLD MY SUKUK TO MATURITY?
You can request your stockbroker Or securities dealer to sell your Sukuk on The
Nigerian Stock Exchange (NSE) Or the FMDQ OTC Securities Exchange upon listing.