Lagos issues bond to raise N137.3 billion to fund infrastructure projects
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Mr. Babajide Sanwo-Olu, the Governor of Lagos State, signed a N137.3 billion 10-year bond yesterday to fund key infrastructural projects in the state.
The debt instrument is part of the N500 billion fourth debt series, which is expected to run from 2021 to 2031.
The governor said the bond was to finance key infrastructure projects, such as roads and healthcare, at the signing ceremony, which took place at the State House in Alausa in the presence of the 24 issuing houses and eight trustees, among others.
He mentioned the Lagos-Badagry Expressway, Lekki Regional Road, Ijeododo Road Rehabilitation, and the alternative route to Admiralty Circle Toll Plaza Rehabilitation.
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“We have been able to achieve this laudable feat — which to some observers had seemed impossible — in the last eight months, thanks to the unwavering support of our transaction advisers.”
“We set out to raise up to N125 billion and received bids totaling N137.3 billion at the Book Build.” This enthusiastic response from the investment community to our administration’s first bond issuance is humbling, and it demonstrates investor confidence in the state’s ability to meet its infrastructure and socioeconomic development goals, as well as meet repayment obligations.
“Despite the heavily oversubscribed book and active participation from a diverse group of institutional investors, including banks, pension fund administrators, asset managers, and corporations, Lagos State has maintained its size and pricing discipline.” Because of the current yield environment, the Series IV Issuance was kept at N137.3 billion and cleared at a 13 percent annual coupon. He explained that only bids that were within the clearing bid were accepted.
Managing Director Chapel Hill, Denam, Kemi Awodehin, led the issuing houses.
“It gives me great pleasure to preside over this ceremony and to welcome you all as Lagos State celebrates another milestone in the Nigerian domestic debt capital markets, with the issuance of the largest bond ever by a sub-national in Nigeria,” Sanwo-Olu said.
Following the debut issuance of a 10-year instrument in 2017, this would be the third time a sub-national would issue a long-date Bond (10 years).
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“We have gathered here to sign the necessary documents required by the Securities and Exchange Commission (SEC) in order to complete the issuance of Lagos State’s N137.3 billion 13% 2021/2031 Fixed Rate Bond Series IV Bond Issuance, which is part of the N500 billion fourth debt issuance programme.”
“At the end of this process, the total value of bonds issued from the Lagos State N500 billion debt issuance program will be N377.715 billion.”
“The imperative to drive our THEMES agenda aggressively has been clear since the moment I formally received my mandate in May 2019.” We formally began this issuance process in April 2021 in order to adequately kick-start the funding of our projects.
“The proceeds of the Bond will be used to finance key infrastructure projects, primarily in roads and healthcare, in line with the state’s vision to build a Greater Lagos.” The Lekki Regional Road, Ijeododo Road Rehabilitation, and the alternative route to Admiralty Circle Toll Plaza Rehabilitation are among them.
“These projects will help our people live better lives while also creating a more conducive environment for commercial and economic activity.” There is no doubt — as previous interventions have demonstrated — that the multiplier social and economic effects will more than justify the investment cost.
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“We thank the Federal Ministry of Finance, PenCom, and the Nigerian Debt Management Office for their cooperation and support.” The Securities and Exchange Commission deserves our gratitude as well.
“We also want to express our gratitude to the investing community for their continued support of Lagos State and our efforts to improve the social and economic well-being of all Lagos residents.” We don’t take your enthusiastic response to our Bond offer for granted.
“We will remain committed to being the most responsible issuer in the Nigerian capital market,” says the company.
Sanwo-Olu also inaugurated nine networks of roads and a bridge in the Kosofe area of the state yesterday, which are expected to serve 300,000 people.
The roads, which span 2.840 kilometers, will improve connectivity in the Lagos mainland’s Kosofe area.
“Today bears testimony to our administration’s promise to ensure continuity of governance by completing projects inherited from the previous administration, particularly those that are directly beneficial to the well-being of our people,” the governor said.
“In addition to launching new projects, we have invested significant resources in the completion of a number of projects that span multiple sectors and are located throughout the state.
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“The Soluyi Community is a strategic settlement with a rapidly expanding population that requires infrastructure renewal. This prompted us to make the completion of this 2.840-kilometer road network, which includes a bridge and will serve a population of over 300,000 people in the Soluyi-Araromi-Ifako-Gbagada Communities, a top priority.
“These projects demonstrate our administration’s commitment to continuing to provide the infrastructure needed for long-term development in every part of the state.”
“By completing these projects, our administration has once again demonstrated our commitment to the welfare and well-being of Lagos residents, as outlined in our Greater Lagos Vision and the Traffic Management and Transportation Pillar of our THEMES Governing Agenda.”
“The ever-increasing population of Lagos, as well as the resulting increase in vehicular traffic volumes and axle loads, are partly to blame for the state’s road infrastructure problems.” Our administration will continue to meet this challenge by increasing our efforts in the areas of road and highway construction and rehabilitation, as well as the expansion of our transportation network, with a renewed emphasis on our multimodal transportation strategy.
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“By utilizing our waterways and rail technology, we can and will relieve some of the pressure on our roads.” This is why we are moving forward with the Lagos Light Rail project, as well as the construction of jetties and the deployment of boats and ferries across the State, with zeal.
“I implore the Community Development Association of this area to take ownership of and responsibility for the wise use of these projects/roads right away.” You must devote your full attention to them and keep them clean at all times, as well as the drainage system free of waste.”
The Governor listed some of the roads’ advantages, including providing an alternative route to the Third Mainland Bridge (TMB) and Apapa-Oworonsoki Expressway via the Third Axial underpass, as well as addressing environmental and infrastructure challenges.
“For us, the driving force behind this is to ensure connectivity and reduce the burden and pressure on major arterial roads that link to an integrated intermodal transport system, which in turn opens up the local economy,” said Engr Aramide Adeyoye, Special Adviser to the Governor on Works and Infrastructure.
Prior to the project’s inception, she claims, the only way in and out of Soluyi Community, Gbagada, was via the always-bustling Ayodele Okeowo Road, which runs alongside Deeper Christian Life Bible Church.
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“The associated traffic gridlock resulting from high vehicular volume during peak periods necessitated the provision of an alternative route to alleviate the discomfort that residents in the area experience while also addressing environmental challenges, particularly flooding due to an inadequate drainage system,” says the report.
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