Osun to build roads, schools with Islamic bond

Osun State Governor Rauf Aregbesola yesterday explained why he took the N11.4 billion Islamic Sukuk bond.

He spoke in Osogbo, the state capital, after signing the documents for the bond.

Aregbesola said he took the bond to develop the state and urged the people to be understanding.

He said the Sukuk, which is the first Islamic bond in Sub-Sahara Africa, would be used to build roads and school.

Aregbesola said: “The Sukuk bond is a veritable avenue for us to access capital to develop our state. We want our people to recognise this opportunity. In name, the bond is Islamic, but it has the conventional bonds’ characteristics and is coordinated by the regular capital and money market investors. Of the 42 investors, only one of them, Jaiz Bank, is Islamic. The name Sukuk is just a nomenclature. The investors are regular Nigerians.”

The bond was issued in accordance with the enactment of the State Bonds, Notes and Other Securities Law, 2012, setting up the Osun Sukuk Company Plc.

The bond was issued in accordance with the Security and Exchange Commission’s rules and regulations.

The N11.4 billion Sukuk (14.75 per cent) fixed return tranche 2 has 42 investors, with Lotus Capital Limited as the leading issuing house and Augusto and co, one of Nigeria’s leading rating agencies, as the rating agent.

Commissioner for Finance, Budget and Economic Planning Wale Bolounduro said the bond gives the government an opportunity to optimise capital for business.

Chairperson of Lotus Capital Ms Hajara Adeola said the bond was successful and over subscribed.

She said the Sukuk’s success was a vote of confidence in the Aregbesola administration.

Ms. Adeola said the governor had become unique for exploring novel ways of doing things.

Also present were Ogun State Deputy Governor Segun Adesegun and members of the state executive council.