The Nigerian Federal government wants to borrow money.
They are doing this by selling something called Sukuk bonds.
If you buy these bonds, they promise to give you 15.75% of the money you spent to buy the bond as profit every year for 10 years.
Details:
- Who is selling the bonds? The Debt Management Office (DMO) for the Federal government.
- What are the bonds called? They are called 10-year Ijarah Sukuk. This means they will last for 10 years.
- How much profit do you get? You get 15.75% interest every year.
- When will it end? In October 2033. This means if you buy the bond now, you will get your money back in 2033.
- When can you buy these bonds? You can buy them between October 3rd and October 11th. The bond deal will be finalized on October 13th.
More Information:
- The DMO told everyone about this through an official statement. In the statement, they mentioned some banks that can help you buy the bonds. These banks are Greenwich Merchant Bank Limited, Stanbic IBTC Capital Limited, and Vetiva Capital Management Limited.
- How much can you buy? The smallest amount you can buy is N10,000. After that, you can buy more in amounts of N1,000. This means you can buy N11,000 or N12,000 and so on.
- Who is really selling the bond? A company called FGN road sukuk company is selling the bond for the government.
- How will they pay you your profit? They will pay you half of your yearly profit every 6 months. When the 10 years is over in 2033, they will give you all your money back.
- What will the government do with the money they get from selling the bonds? They will use it to build roads in different parts of Nigeria.
Advice: If you are interested in buying these bonds, you should talk to the banks mentioned above. They can give you more information and help you buy the bonds.
Frequent Asked Questions
What is a Sukuk bond?
A Sukuk bond is an Islamic bond that complies with the Sharia law. It is a financial instrument that represents the ownership of an underlying asset, such as a building or road. The issuer of the bond sells the asset to investors and then leases it back, paying the investors a rental income. The rental income is paid semi-annually, and the principal is repaid at the end of the bond term.
What is the interest rate on the Federal Government Nigeria Sukuk bond?
The interest rate on the Federal Government Nigeria Sukuk bond is 15.75% per annum. This means that investors will receive a rental income of N15.75 for every N1,000 invested every year.
What is the tenor of the Federal Government Nigeria Sukuk bond?
The tenor of the Federal Government Nigeria Sukuk bond is 10 years. This means that investors will hold the bond for 10 years before receiving their principal back.
What is the minimum subscription amount for the Federal Government Nigeria Sukuk bond?
The minimum subscription amount for the Federal Government Nigeria Sukuk bond is N10,000. This means that investors can invest as little as N10,000 in the bond.
Who can invest in the Federal Government Nigeria Sukuk bond?
The Federal Government Nigeria Sukuk bond is open to all investors, including individuals, corporates, and foreign investors.
How can I invest in the Federal Government Nigeria Sukuk bond?
Investors can invest in the Federal Government Nigeria Sukuk bond through primary market dealers (PMDs). PMDs are licensed financial institutions that are authorized to sell government bonds.
When is the subscription period for the Federal Government Nigeria Sukuk bond?
The subscription period for the Federal Government Nigeria Sukuk bond is from October 3rd to October 11th, 2023.
When is the settlement date for the Federal Government Nigeria Sukuk bond?
The settlement date for the Federal Government Nigeria Sukuk bond is October 13th, 2023.
What are the risks of investing in the Federal Government Nigeria Sukuk bond?
All investments carry some degree of risk, and the Federal Government Nigeria Sukuk bond is no exception. Some of the risks associated with investing in the bond include:
- Credit risk: The credit risk of the bond is the risk that the issuer of the bond, the Federal Government of Nigeria, may default on its obligations.
- Interest rate risk: The interest rate risk of the bond is the risk that the value of the bond will decline if interest rates rise.
- Liquidity risk: The liquidity risk of the bond is the risk that investors may not be able to sell their bonds quickly or at a fair price.