The Governor Babajide Sanwo-Olu led Lagos State Government has announced the launch of its Series I Bond Issuance under the N1 Trillion Debt and Hybrid Instruments Issuance Programme (DAHI Programme).
According to the government, the Series I Bond Issuance is aimed at raising up to N100 billion from the capital market and is scheduled to close on May 12, 2023.
The government also clarified that the issuance is being managed by several issuing houses and has been assigned an AA- long-term rating with a stable outlook by Agusto & Co and GCR, respectively.
It was stated that the issuance, which is targeted to high net-worth individuals has a minimum investment uptake of N10 million in multiples of N1 million. It is part of the State’s efforts to raise capital to finance priority projects and boost economic growth.
The government noted that its economy makes up 15% of Nigeria’s GDP, and it has a “robust financial condition, a suitable expenditure profile, and a very strong cash-generating capacity to meet local currency obligations in a timely manner from Internally Generated Revenues (IGR).”
Meanwhile, data mined from the National Bureau of Statistics indicate the state generated N773 billion in revenue in 2021 which includes tax revenue of N405 billion.
It was clarified that the proceeds from the issuance will be used to finance priority projects, which are detailed in the pricing supplement, aimed at improving the State’s infrastructure and fostering economic growth.
It is imperative to note that the issuance is a fixed-rate senior unsecured bond with a tenor of 10 years and a pricing range of 14.875% – 15.250%. The bond will have an amortized principal repayment following a 24-month moratorium and will be funded from the State’s Internally Generated Revenue.
LASG stated that the issuance is being offered for a subscription via book-build, with a minimum subscription of NGN10,000,000 and multiples of NGN1,000,000 thereafter. The bond will be listed on the Nigerian Exchange Limited and/or FMDQ Securities Exchange Limited. Applicable taxes shall apply except otherwise exempt.
It is no news that the Lagos State Government has been a leader in the progression and implementation of the National Sustainable Development Goals (SDGs). It is on record that over the last 10 years, Lagos State has spent over N3 trillion on infrastructure developments within the State, making it a first-choice destination for foreign investors.
