* Osun State issues Nigeria's first sukuk -bankers
* Nigeria tapping into growing demand for Islamic debt
By Chijioke Ohuocha
LAGOS, Oct 2 (Reuters) - Nigeria's Osun State has issued a10 billion naira ($62 mln) sukuk yielding 14.75 percent, bankerssaid on Wednesday, the first Islamic bond from a major economyin sub-Saharan Africa.
The cocoa-producing, southwestern state of Osun received11.4 billion naira in total subscriptions for its seven-yearpaper, from asset managers and Islamic funds, bankers said. Theoffer closed on Monday.
The yield offered was the same Osun State paid last year tosell a conventional seven-year bond worth 30 billion naira.
Sukuk have become an increasingly popular investmentglobally, particularly among cash-rich funds in the Gulf andsoutheast Asia.
Nigeria's profile as Africa's most liquid debt market afterSouth Africa has been rising since JP Morgan andBarclays included its bonds in their sovereign bondindices in the last year, encouraging greater foreignparticipation in its debt market.
Other African countries including South Africa, Kenya andSenegal have been laying plans to issue a sukuk and Gambia hasbeen selling small amounts of Islamic debt for several years.
The sukuk is based on an ijara structure, a common leasingarrangement in Islamic finance, which bans payment of interest.
Local credit rating agency Agusto & Co gave an A rating tothe sukuk, suggesting it will attract ample investor demand.Bankers said earlier that Osun hoped the issue, which isexpected to be listed on the Nigerian Stock Exchange, would bebought by both local pension funds and international investors.
In March this year, Nigeria's Securities and ExchangeCommission approved new rules facilitating issues of sukuk.
About half of Nigeria's 160 million people are Muslims,giving it sub-Saharan Africa's largest Muslim population.