Lagos, Nigeria’s commercial capital and Africa’s 5th largest economy will be raising NGN500 billion via a bond issuance programme.
According to people with the knowledge of the matter, Futureview Financial Services Limited has been appointed by the Lagos state government as the bookrunner and joint-issuing house on the debt instrument.
In an invitation email sent to PageOne.ng Big Business Desk, Futureview said “The bond will be issued in tranches; for the first tranche of bonds the State Government is seeking to raise up to N60 billion at a minimum subscription amount of N10,000,000 (that is, 10,000 units @ N1,000/unit) and multiples of N5,000,000 thereafter”.
The offer is expected to open Monday December 12, 2016 and close Friday December 16, 2016. The bonds will be listed on the FMDQ OTC Securities Exchange and the funds raised will be used to execute several priority projects including the construction and rehabilitation of schools and roads in the State.
The coupon (interest rate) has not being stated but the Futureview said “The bond will have very attractive features including the fact that the coupon rate will be determined by book building making it very competitive”.
The funds raised from the bond are expected to be channeled towards infrastructure programmes of the government. Last week, Akinwunmi Ambode, the Governor of Lagos State presented a NGN813 billion budget for 2017 fiscal year.
The budget highlighted major road and public infrastructure projects aimed at opening up the hinterlands of the city to further create jobs and commercial opportunities across the state. The state will also be carrying out a feasibility study on the construction of the Fourth Mainland Bridge. The bridge was budgeted to cost over NGN844 billion. It will traverse major parts of the state connecting surburbs, and villages to the Lagos Mainland and the Island
Lagos is the largest borrower after the federal government of Nigeria. The state has sold several bonds over time. With about USD1.43 billion debt profile as at September 2016, Lagos state has about 39.17% of Nigeria’s country’s total subnational foreign debts.