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Lagos issues N137bn bond to finance road projects, health

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The Lagos State government has facilitated a bond worth N137.328 billion in the capital market to deliver infrastructure in the state.

The bond, which was issued at a 13 per cent fixed rate, is the third time Lagos government would be issuing a long-tenure bond of 10 years (2021-2031), according to a statement signed by Chief Press Secretary Gboyega Akosile.

Governor Babajide Sanwo-Olu, on Monday at the Securities and Exchange Commission (SEC), explained that proceeds from the bond would be used to finance key infrastructure projects in healthcare, environment and road construction.

These include: the 10-km Regional Road in Eti Osa, six-lane Lekki-Epe Expressway, Ijeododo Road in Alimosho and Oba Sekumade Road in Ikorodu, among others.

“Lagos once again marks another milestone in the domestic debt capital markets, with the issuance of the largest bond ever by a sub-national Government in Nigeria. The signing ceremony finalises the issuance of N137.3 billion bond at 13 per cent fixed rate in our Series IV Bond Issuance under the N500 Billion Fourth Debt Issuance Programme,” Sanwo-Olu said.

“We set out to raise up to N125 billion, but we closed the book with bids totalling N137.3 billion. This is a strong response from the investing community to our administration’s debut bond issuance. This humbling achievement is a testament to continued investors’ confidence in the state’s ability to deliver on its infrastructural and socio-economic developmental objectives, and also to meet repayment obligations.”

He added that in line with the state’s vision to build a Greater Lagos, proceeds from this bond would be used to finance infrastructure projects, primarily in roads, environment and healthcare.

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“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.”

Sanwo-Olu further said that there had been multiplier effects on socio-economic activities felt from the previous intervention capital raised, which justified the cost of investment in critical sectors.

He noted that Lagos had maintained high discipline on the size and pricing of its bonds, noting that the state’s clearance to proceed with the issuance at a coupon rate of 13 per cent yearly fell within the acceptable clearing bid.

Lagos State Attorney-General and Commissioner for Justice Moyosore Onigbanjo, represented by the Permanent Secretary Titilayo Shitta-Bey, said members of the State Executive Council, on the December 20, 2021 meeting, approved the resolution of the government to issue the bond.

Representative of the 24 issuing parties and Managing Director of Chapel Hill Denham, Kemi Awodein, described the bond as a ‘landmark transaction’ and largest to be issued by a non-federal government entity.

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Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org. Follow on Twitter @theminentmuyiwa and on Instagram @Hollumuyiwah.

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