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Lagos State Raises N137.3bn Bond For Infrastructure Development

Lagos Govt Paid N4.2bn WAEC Fees In 4 Years - Sanwo-Olu
Lagos State Government, Southwest Nigeria, has raised a N137.3 billion 10-year bond to finance key infrastructural projects in the state.

Gatekeepers News reports that at 13 percent, the debt instrument is under the N500 billion fourth debt series expected to run between 2021 and 2031.

At the signing ceremony which took place at the State House, Alausa on Monday, in the presence of the 24 issuing houses and eight trustees among others, Sanwo-Olu said the bond was to finance key infrastructure projects, on roads and healthcare.

These he listed to include the Lagos-Badagry Expressway, Lekki Regional Road, Rehabilitation of Ijeododo road and Rehabilitation of the alternative route to Admiralty Circle Toll Plaza.

“In the last eight months, and with the unwavering support of our transaction advisers, we have been able to achieve this laudable feat — which to some observers had seemed impossible.

“We set out to raise up to N125 billion and closed the Book Build with bids totalling N137.3 billion. This strong response from the investing community – to our administration’s debut bond issuance – is humbling and is indeed a testament to continued investor confidence in the state’s ability to deliver on its infrastructural and socio-economic developmental objectives; and to meet repayment obligations.

“Notwithstanding the significantly over-subscribed book, and active participation from a wide array of institutional investors – including banks, pension fund administrators, asset managers and corporates, Lagos State has maintained its discipline on size and pricing. Mindful of the prevailing yield environment, the Series IV Issuance was maintained at N137.3 Billion and cleared at a coupon of 13 per cent per annum. Only bids within the clearing bid were accepted,” he explained.

The issuing houses were led by Managing Director Chapel Hill, Denam, Kemi Awodehin.

Sanwo-Olu added: “It gives me great pleasure to preside over this ceremony and to welcome you all, as Lagos State once again celebrates another milestone in the Nigerian domestic debt capital markets, with the issuance of the largest bond ever by a sub-national in Nigeria.”

This was also the third time a sub-national would be issuing a long-date Bond (10 years), following the debut issuance of a 10-year instrument in 2017.

“We are gathered here for the signing of the necessary documents required by the Securities & Exchange Commission (SEC) to finalise the issuance of Lagos State’s N137.3 billion 13 per cent 2021/2031 Fixed Rate Bond Series IV Bond Issuance, under the N500 billion fourth debt issuance programme.

“The conclusion of this process will bring to N377.715 billion the total value of bond issued from the Lagos State N500 billion debt issuance programme.

“From the moment I formally received my mandate in May 2019, the imperative to drive our THEMES agenda aggressively has been clear. In order to adequately kick-start the funding of our projects, we formally commenced this issuance process in April 2021.

“In line with the state’s vision to build a Greater Lagos, the proceeds of the Bond will be used to finance key infrastructure projects, primarily in roads and healthcare. These include the Lekki Regional Road, Rehabilitation of Ijeododo road and Rehabilitation of the alternative route to Admiralty Circle Toll Plaza.

“These projects will contribute to a better quality of living for our people, while also creating a more enabling environment for commercial and economic activity. There is no doubt — and we have seen this from previous interventions — that the multiplier social and economic effects will more than justify the cost of the investment.

“We applaud the Federal Ministry of Finance, PenCom and the Debt Management Office Nigeria, for their support and collaboration. Our appreciation also goes to the Securities & Exchange Commission.

“We equally thank the investing community for their sustained support of Lagos State and our efforts to improve the social and economic welfare of all residents in Lagos. We do not take for granted your enthusiastic response to our Bond offer.

“We will continue to uphold our commitment to remain the most responsible issuer in the Nigerian capital market.”

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