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Tuesday, June 6, 2023

Lagos Taps Bond Market to Raise N100 billion at 14.875%-15.250%

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Lagos State Government’s (LASG) Series I up to ₦100 Billion Bond Issuance, under LASG’s ₦1 Trillion Debt and Hybrid Instruments Issuance Programme is now open.

The 10 year bond is expected to price between 14.875% and 15.250%.

The Offer is scheduled to close on Friday, May 12, 2023.

Lagos State is Nigeria’s economic focal point with a GDP of N26.6 trillion (CAGR of c.11% from 2017 to 2021, representing c.15% of Nigeria’s GDP).

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% 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% of Nigeria’s port revenue being generated in Lagos from 3 lighter terminals and 2 seaports – and a first-choice destination for foreign investors.

Lagos State has been assigned an AA- long-term rating (Stable Outlook) by Agusto & Co and GCR, respectively.

This represents an upgrade from the previous A+ rating, given 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).

Lagos’ IGR is over 70% of the State’s total revenues. In 2021, the State generated total revenue of N771bn, including IGR of N573bn.

The issue proceeds of the 10 Years tenor bond will be applied to financing priority physical and social infrastructure projects across the State.

It is backed by an Irrevocable Standing Payment Order (ISPO) and Consolidated Debt Service Account (CDSA) funded from the State’s Internally Generated Revenue.

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