Nigeria’s second subnational bond overshot its target with some 15 per cent within three days, underlining the continuing appetite for alternative investments by Nigerian investors.

Closing transaction details obtained at the weekend by The Nation indicated that the Lagos State Government (LASG)’s Series II N20 billion Forward-Ijarah Sukuk Issuance recorded subscription of N23 billion, 115 per cent subscription.

The LASG Sukuk, the second by a registered Nigerian sub-national, attracted diverse investors to the ongoing infrastructure development in Lagos State. It was issued under LASG’s N1 Trillion Debt and Hybrid Instruments Issuance (DAHI) Programme.

Multiple market sources confirmed to The Nation at the weekend that the book building for the N20 billion Sukuk, which opened for three days, closed with subscription of N23 billion with diverse portfolio of investors including pension funds, high networth individuals and investment management firms among others.

With the successful closure of the book building, the formal allotment and final approval of issuance are expected to be announced later this week.

Book building method allows investors, especially high networth (HNI) and institutional investors to submit preliminary orders with indicative coupon based on the range. The issuer and its professional parties will then determine the closing coupon based on the order book.

LASG offered a seven-year, fixed rate, forward-ijarah Sukuk with guidance rental rate of between 14.500 per cent and 14.675 per cent. Minimum subscription was N10 million with multiples of N1 million thereafter.

The net proceeds of the Sukuk issuance would be used to finance the construction and rehabilitation of the Awoyaya section of the Eti-Osa-Lekki-Epe Expressway.

The Sukuk issuance came few days after LASG successfully raised N100 billion in a successful start to the sub-national’s N1 trillion long-term infrastructural financing plan.

https://thenationonlineng.net/nigerias-second-subnational-sukuk-records-oversubscription/