Lagos State launches a new N100 billion bond issuance; applications close May 12.

The Series I Bond Issuance under the N1 Trillion Debt and Hybrid Instruments Issuance Programme (DAHI Programme) has been launched by the Lagos State Government (LASG).

The Series I Bond Issuance will mature on Friday, May 12, 2023, and its goal is to raise up to N100 billion from the capital market. The issuance is being managed by various issuing houses, and Agusto & Co and GCR have each given it an AA- long-term rating with a stable outlook.

Investment

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.

According to the Lagos State government, 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).”

Data from the National Bureau of Statistics indicate the state generated N773 billion in revenue in 2021 which includes tax revenue of N405 billion.

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.

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.

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.

Lagos State SDG

The Lagos State Government has been a leader in the progression and implementation of the National Sustainable Development Goals (SDGs). Over the last 10 years, Lagos State has spent over N3 trillion on infrastructure development within the State, making it a first-choice destination for foreign investors.

The launch of the Series I Bond Issuance is a significant step towards the achievement of the Lagos State Government’s vision of making Lagos a 21st-century economy and a smart city, in line with the State’s THEMES Agenda (T – Traffic Management and Transportation, H – Health and Environment, E – Education and Technology, M – Making Lagos a 21st Century Economy, E – Entertainment and Tourism, and S – Security and Governance).