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Lagos issues N137bn bond for Lekki road projects, healthcare, others

The Lagos State Government has said all statutory instruments that will facilitate the raising of N137.328bn from the capital market to deliver key infrastructure in critical sectors of the economy have been met.

Governor Babajide Sanwo-Olu, presided over the ceremony where necessary documents required by the Securities and Exchange Commission to facilitate the issuance of 13 per cent fixed rate bond were signed by the state’s Attorney General, issuing parties and trustees of the funds, according to a statement.

It said the event marked the third time Lagos Government would be issuing a long-tenure bond of 10 years (2021-2031), bringing to a total value of N377.715bn bond issued from the Lagos State’s Series IV N500bn Debt Issuance Programme.

The statement noted that the state set out to raise N125bn from the capital market but closed the bids with N137.3bn, following oversubscription.

Sanwo-Olu said the development was “a strong response from the investing community” and testified to the confidence of investors in the state’s ability to deliver on its infrastructural and socio-economic developmental objectives, while meeting repayment obligations.

He said proceeds from the bond would be used to finance key infrastructure projects in healthcare, environment and road construction, including the 10-km Regional Road in Eti Osa, six-lane Lekki-Epe Expressway, Ijeododo Road in Alimosho and Oba Sekumade Road in Ikorodu.

He said the projects for which the funds would be earmarked would contribute to a better quality of living for the residents, while also creating a more enabling environment for commercial and economic activities.

“Lagos once again marks another milestone in the domestic debt capital markets, with the issuance of the largest bond ever by a subnational government in Nigeria. The signing ceremony finalises the issuance of N137.3bn bond at 13 per cent fixed rate in our Series IV Bond Issuance under the N500bn Fourth Debt Issuance Programme,” Sanwo-Olu said.

Sanwo-Olu said Lagos had maintained high discipline on the size and pricing of its bonds, noting that the state got the clearance to proceed with the issuance as its coupon of 13 per cent yearly fell within the acceptable clearing bid.

He disclosed that the issuance process started in April, based on the advice of the state’s transaction advisers.

He said with the issuance of the third bond, the imperative to aggressively drive his administration’s THEMES agenda had been boosted.

The governor applauded the Federal Ministry of Finance, SEC, National Pension Commission, and Debt Management Office for supporting the state’s infrastructure drive.

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