The Republic of Senegal, through the Société Nationale de Gestion et d’Exploitation du Patrimoine Bâti de l’État (SOGEPA SN), has sold XOF 330bn (around $525.4m) in three-tranche Sukuk Ijarah, attracting orders from regional and Middle Eastern investors.
The first tranche is a seven-year Sukuk; the second is a 10-year tranche, and the third tranche holds a 15-year tenor.
The Sukuk certificates will be listed on the Bourse Regionale des Valeurs Mobilieres.
Proceeds from the issuance will be utilized to finance the acquisition of buildings to be used as administrative offices, as well as financing of various other strategic government projects.
The Sukuk was issued recently through a special purpose vehicle (SPV) called the Fonds Commun de Titrisation de Créances (FCTC), or the Common Fund for the Securitization of Claims, which has been duly authorized and licensed by the Financial Market Authority (CREMPF).
The Islamic Bank of Senegal (BIS) was the Lead Arranger alongside the Islamic Corporation for the Development of the Private Sector (ICD), acting as the Co-Arranger.
Taiba Titrisation acted as the Management Company in charge of managing the SPV pursuant to the prevailing regulations.
Mouhamadou Madana Kane, CEO of BIS, said: “BIS has successfully syndicated the Sukuk to regional investors and those from the Middle East with an issue coverage rate of more than 110% within 3 days of subscription.”
“This is the largest transaction in the history of the sub-regional market. ICD & BIS look forward to replicating Senegal’s Sukuk success with other countries and corporates in the region.”
Ayman Sejiny, CEO of ICD, added: “Senegal has returned to the regional Islamic debt capital markets almost six years after its last Sukuk issuance. This is the West African nation’s third Islamic issuance, whilst the first and second issuances closed in 2014 and 2016, respectively. We are proud to see ICD & BIS as part of this developmental journey in sub-Saharan Africa and the WAEMU region. Senegal holds the distinction of being the first African nation to issue a sovereign Sukuk.”
ICD is playing a pioneering developmental role in Emerging & Frontier Markets.
Despite regulatory challenges, ICD has assisted a total of six sovereigns with debut Sukuk issuances.
In recent years, the ICD has focused its work on Africa and Central Asia.
The ICD has advised several governments on their debut sales of Sukuk, including Senegal, Jordan, Togo, Mali, Maldives, and Ivory Coast. ICD hopes to attract private companies to the market as well.
ICD has also Co-Arranged many Sukuk deals for its corporate clients.
ICD has seen an increasing demand from sovereigns and corporates who are willing to explore alternative financing methods such as Sukuk.