In a bid to foster infrastructural development in the state, the Lagos state government has announced the launch of its third series N500 billion bond issuance programme, which it seeks to raise N100 billion.
The offer to raise N100 billion opened on Tuesday 31st of December 2019 and will close on Monday, January 13, 2020. The funds raised is being proposed to finance the speedy development of physical and social infrastructural development projects in the state in line with the agenda of the current administration.
Meanwhile, the senior unsecured bond issue, which has a 10-year tenor with a fixed rate, will be due for amortized redemption after the expiration of a 24-month moratorium. The offer holds a minimum subscription of N10 million with multiples of N5 million thereafter.
The bond, listed both on FMDQ Securities Exchange and the Nigerian Stock Exchange, is to pay coupon rate between 11.75% – 12.25% and the proceeds from investing in the bond exempted from tax. The bond holds an Aa rating implying that the risk of default on payment by the issuer is low.
However, the Lagos State Government reportedly disclosed that it was pleased to continue to access the domestic debt markets, given the very strong support gained over the last twelve (12) years from the investors community. It added that the state had been able to access much needed complementary funding, which had been used to augment the state’s revenues and provide the critical support required to accelerate and actualize the provision of physical and social amenities.