Lagos signs N137.3bn bond issuance for key infrastructural projects

The Lagos State Government on Monday signed the issuance of N137.3 billion bond, aimed at executing key infrastructural projects in the state.

Speaking during the signing ceremony in Ikeja, Lagos State Governor, Mr Babajide Sanwo-Olu, said that the conclusion of the process brought to N377.715 billion, the total value of bond issued from the Lagos State N500 billion debt issuance programme.

Sanwo-Olu said this is also the third time a sub-national would issue a long-date Bond (10 years), in the Nigerian domestic debt capital markets, following the debut issuance of a 10-year instrument in 2017.

He said that in order to adequately kick-start the funding of the projects, the state government formally commenced the issuance process in April 2021.

According to him, in the last eight months, and with the unwavering support of transaction advisers, the government has been able to achieve this laudable feat, which to some observers looked impossible.

”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.

”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,” he said.

The governor said that in line with the state’s vision to build a Greater Lagos, the proceeds of the Bond would be used to finance key infrastructure projects, primarily in roads and healthcare.

He said that these projects included the Lekki Regional Road, Rehabilitation of Ijeododo road and Rehabilitation of the alternative route to Admiralty Circle Toll Plaza.

Sanwo-Olu said that these projects would contribute to a better quality of living for the people, while also creating a more enabling environment for commercial and economic activities.

”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 investment.

”We applaud the Federal Ministry of Finance, PENCOM and 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,” he said.

Earlier, the Commissioner for Finance, Dr Rabiu Olowo, said that the 10 years bond from 2021 to 2031, at an interest rate of 13 per cent, would save the state government of wastage.

Representing the investing communities, the Managing Director of Chapel Hill Denham Advisory, Mrs Kemi Awodein, thanked the state government for trusting them to finance key projects in the state for the benefit of the over 21 million Lagos residents.