(Corrects sum of total sukuk orders in fifth paragraph to 233 billion CFA francs)
Sept 29 (Reuters) - Senegal has upsized its second sale of sovereign sukuk, with Ivory Coast and Togo expected to close their own deals in coming days, as Islamic finance gains traction as an alternative funding option for African sovereigns.
Despite strong growth in the Middle East and Southeast Asia, Islamic finance has lagged in Africa although it could be an important growth driver for the industry as it is home to a quarter of the world’s Muslims.
Senegal issued a debut sukuk in 2014 and returned to the market in July with a 10-year deal paying a 6 percent profit rate backed by assets from Dakar’s international airport.
Investor demand prompted the issuer to seek regulatory approval to expand the size of the deal, according to the Saudi-based Islamic Corporation for the Development of the Private Sector (ICD) which helped arrange the sukuk.
Senegal’s sukuk raised a total of 200 billion CFA francs ($341.5 million) from an initial plan for 150 billion CFA francs, the ICD said. It attracted total orders of 233 billion CFA francs.
More than half of the Senegal sukuk was sold to local investors, with a third taken up by investors from the Ivory Coast and Togo, which are next in line to tap the market.
The two governments aim to finalize their sukuk deals by early next month, which the ICD is also arranging.
Ivory Coast is completing a sale of 150 billion CFA franc worth of 7-year sukuk, the second phase of a 300 billion CFA franc sukuk programme set up last year.
Togo aims to raise 150 billion CFA francs from its debut sukuk, which has a 10-year maturity and 6.5 percent yield.
Niger has also signed up for a sukuk programme to raise 150 billion CFA francs in two phases, although a timing has yet to be determined.
The CFA franc is issued by the central bank of the 8-nation West African Economic and Monetary Union. ($1 = 585.6200 CFA francs) (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)
Our Standards: The Thomson Reuters Trust Principles.