Lagos adds $275.36 million Infrastructure Bond to its rising loan book

File photo: Picture depicting a pothole scene in Lagos (afp)
  • Lagos raises N100 billion series III bond to finance key infrastructure projects in Nigeria's commercial nerve center.
  • Babajide Sanwo-Olu, the state governor, says the bond offered through book-building recorded an over-subscription of 196.5%.
  • The debt issuance is part of the N500 Billion Debt Issuance Programme launched in December 2016.

Lagos state government has raised a N100 billion series III bond to finance key infrastructure projects in Nigeria's commercial nerve center.

Babajide Sanwo-Olu, the state governor, said the bond offered through book-building recorded an over-subscription of 196.5%.

We will ensure that the entire Lagosians feel the impact of this investment, that they feel the direct intervention in their houses, on the roads, on the bridges we build, and the hospitals that we are going to build.

“We will ensure they feel it in the schools that we are going to renovate and build for their children, in the slums that we are going to renovate, such that the real essence of governance can be given to all of them,News Agency of Nigeria (NAN) quoted the governor in a report.

The governor thanked the investors for the confidence they had in the government of the state and assured that the fund would be judiciously utilised, according to the report.

This is Governor Sanwo-Olu-led administration’s debut bond issuance in a follow up to the N500 Billion Debt Issuance Programme, which started in December 2016.

In 2016, the Lagos state government launched a N500 billion bond issuance programme to fund socio-economic development programmes and projects.

At the inception of the programme, the former administration raised the first tranche at N60 billion. In 2017, the government also issued another debt instrument at N85.14 billion in Series 2 Bond Issuance.

At $1.2 billion, Lagos state accounted for 10.9% of the country's total domestic debt stock at N4.04 trillion ($11.17 billion) as of September 31, 2019, according to a recent report by the Nigerian Bureau of Statistics.

On the most indebted states to domestic lenders in Q3 2019, Lagos still emerged as the most indebted state among the 36 Nigerian states, including the Federal Capital Territory.

With the new bond issuance, the government has successfully added to its robust loan book, a big concern for analysts on the end use of the debt instrument.

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