The Nigerian Exchange Limited (NGX) has admitted the listing of Lagos State Government (LASG) N115 billion series I, 10-year 15.25% fixed rate bond due 2033 under the N1 trillion debt and hybrid instruments issuance (DAHI) program on the bourse.
A total of 115,000,000 units of LASG bonds valued at N115 billion were listed at an issued price of N1,000 per unit. The rental on the Bond is 15.25 percent, payable bi-annually on May 23 and November 23. The maturity date is May 23, 2033.
The state governor, Babajide Sanwo Olu at the agreement signing ceremony of the N115 billion 2033 Bond Issuance at a 15.25 percent interest rate and a seven-year N19.815 billion Sukuk Issuance at 14.675 percent interest said the state would invest more in education, health, and roads with the proceeds from its 10 and seven years Bond and Sukuk issuances.
Sanwo-Olu’s administration had earmarked N500 billion bond issuance to develop the state, out of which N100 billion and N137 billion were issued in 2020 and 2021.
The State Government in October listed its Lagos State Infrastructure Sukuk SPV Plc, a special purpose vehicle of the LASG, worth about N19.82 billion 14.675 percent Series II Fixed Return Forward Ijarah Sukuk on the NGX.
The net proceeds of the Sukuk issuance would be used to finance the construction and rehabilitation of the Awoyaya section of the Eti-Osa-Lekki-Epe Expressway.
The Sukuk was rated ‘Aa’ and ‘Aa-‘ by Agusto & Co. and Global Credit Rating (GCR), with the ratings alluding to the state’s resilient financial condition, robust financial flexibility, suitable expenditure profile and very strong cash-generating capacity to meet local currency obligations in a timely manner from Internally Generated Revenues (IGR).
The Sukuk was also enhanced by an Irrevocable Standing Payment Order (ISPO) on Lagos State’s share of statutory allocation.
Lagos State’s IGR is over 70 percent of the state’s total revenue. In 2021, the state generated a total revenue of N771 billion, including an IGR of N573 billion.
Offer documents noted that Lagos State is Nigeria’s economic focal point with a Gross Domestic Product (GDP) of N26.6 trillion and a cumulative annual growth rate (CAGR) of 11 per cent from 2017 to 2021, representing some 15 per cent of Nigeria’s GDP.
As part of its attraction to investors, the reports pointed out that Lagos State is among the 10 fastest-growing markets in Africa and was ranked the 4th largest city in Africa in 2021, accounting for the location of more than 65 per cent of Nigeria’s industrial capacity.
The headquarters for most Nigerian banks are in Lagos as well as top-tier companies and transnational corporations. The state is strategically positioned as a major trade port – with 50 per cent of Nigeria’s port revenue being generated in Lagos from three lighter terminals and two seaports – and a first-choice destination for foreign investors.
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