The Republic of Senegal, through the Société Nationale de Gestion et d’Exploitation du Patrimoine Bâti de l’État (SOGEPA SN), sold XOF 330bn (around USD 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.
In accordance with prevailing regulations, 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
Considering this new milestone, Mr. Mouhamadou Madana KANE, CEO of BIS commented: “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”
Mr. 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. Over last year, ICD managed to assist the Republic of Maldives to raise US$500 million. In 2020, ICD made its debut, in the eighth position, on Bloomberg’s international Sukuk issuance league table with a vision of being a key player in the Islamic debt capital markets.
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and is member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999 to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to the governments and private companies, and encouraging cross border investments. ICD is Rated A2’ by Moody’s, ‘A-’ by S&P and, A+ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collective financing.
The Islamic Bank of Senegal is a financial institution which was created in 1982 and constituted in the form of a public limited company under Senegalese law with a Board of Directors. In accordance with its articles of association, the company has the corporate purpose directly or indirectly, in all countries and more particularly in the Republic of Senegal, either for its own account or for the account of third parties or in participation and in any form whatsoever:
- All banking, finance and credit operations, using funds received from private or public persons;
- The provision of short, medium and long term credit;
- All Islamic Financial operations according to the principles of Islam.
With the support of the main shareholders, the BIS intends to contribute to the economic development of Senegal through the achievement of the fundamental objectives set out in article 3 of its statutes, namely:
- Carry out savings collection and credit distribution activities based on the principles laid down by Islam, thus meeting the needs and aspirations of a large part of the Senegalese population.
- Offer modern and competitive banking services to businesses and economic operators in accordance with Islamic prescriptions.
About Taiba Titrisation
Taiba Titrisation Sa is a limited liability company established under Senegalese laws to operate as Management Company of SPVs established pursuant to the financial market authority regulations for the purposes of sukuk issuances. Taiba is licensed by the CREMPF and the headquarter is in Dakar, Senegal. It is a subsidiary of the ICD.
SOGEPA SN is the Sate Company for the management and operation of the State-owned buildings. It was established by the Senegalese government to generate funds and cover the growing real estate/office space needs of the government.