Lagos Begins Sale of N100bn 10-Year Bonds at 12.25%

January 6, 2020
Lagos government

By Modupe Gbadeyanka

The Lagos State government has commenced the sale of the N100 billion worth of bonds it planned to auction to investors at the local debt market. The exercise kicked off on Tuesday, December 31, 2019 and is expected to close on Monday, January 13, 2020.

Business Post reports that the N100 billion series III bond sale is under the N500 billion bond programme of the state government, with ratings of A+(GCR) from Agusto & Co, a local reputable rating agency.

According to the government, proceeds from the fixed rate senior unsecured bonds would be used to finance physical and social infrastructural development projects across the state.

A notice concerning the bond sale said the debt instrument would be sold at an indicative coupon rate between 11.75 percent and 12.25 percent and would be listed on the FMDQ Securities Exchange and/or the Nigerian Stock Exchange (NSE).

Investors willing to subscribe to the bond have been urged to buy from as low as N10 million with multiples of N5 million thereafter.

According to the Lagos State government, the bonds are tax-free, while an application would be submitted to the Central Bank of Nigeria (CBN) for the grant of liquidity status at the completion of the exercise.

In mid-December 2019, Business Post reported that officials of the Securities and Exchange Commission (SEC) were in the state to inspect some ongoing projects by the Lagos State government, which the bond proceeds are to be used for.

The state Governor, Mr Babajide Sanwo-Olu, had approached the Lagos State House of Assembly (LAHA) for an approval to issue the debt instrument worth N100 billion to investors so as to raise funds to complete some projects in the state.

In a letter to the parliament, the Governor had said he needed funds for the completion of Lagos-Badagry express road; Agege Pen cinema overhead bridge; Agric-Isawo road; Bola Ahmed Tinubu-Igbogbo road; rehabilitation of schools; initiate and complete smart city project and zero tolerance for portholes, among others.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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