Lagos Raises Nigeria’s Largest Sub-National Bond of $137bn to Finance Infrastructure

Lagos State Governor, Mr. Babajide Sanwo-Olu on Monday signed a N137.3 billion 10-year bond to finance key infrastructural projects in the state.

At 13 per cent, the debt instrument is under the N500 billion fourth debt series expected to run between 2021 and 2031.

At the signing ceremony which took place at the State House, Alausa in the presence of the 24 issuing houses and eight trustees among others, the governor said the bond was to finance key infrastructure projects, on roads and healthcare.

These he listed to include the Lagos-Badagry Expressway, Lekki Regional Road, Rehabilitation of Ijeododo road and Rehabilitation of the alternative route to Admiralty Circle Toll Plaza.

“In the last eight months, and with the unwavering support of our transaction advisers, we have been able to achieve this laudable feat — which to some observers had seemed impossible.

“We set out to raise up to N125 billion and closed the Book Build with bids totalling N137.3 billion. This strong response from the investing community – to our administration’s debut bond issuance – is humbling and is indeed a testament to continued investor confidence in the state’s ability to deliver on its infrastructural and socio-economic developmental objectives; and to meet repayment obligations.

“Notwithstanding the significantly over-subscribed book, and active participation from a wide array of institutional investors – including banks, pension fund administrators, asset managers and corporates, Lagos State has maintained its discipline on size and pricing. Mindful of the prevailing yield environment, the Series IV Issuance was maintained at N137.3 Billion and cleared at a coupon of 13 per cent per annum. Only bids within the clearing bid were accepted,” he explained.

The issuing houses were led by Managing Director Chapel Hill, Denam, Kemi Awodehin.

Sanwo-Olu added: “It gives me great pleasure to preside over this ceremony and to welcome you all, as Lagos State once again celebrates another milestone in the Nigerian domestic debt capital markets, with the issuance of the largest bond ever by a sub-national in Nigeria.”

This was also be the third time a sub-national would be issuing a long-date Bond (10 years), following the debut issuance of a 10-year instrument in 2017.

“We are gathered here for the signing of the necessary documents required by the Securities & Exchange Commission (SEC) to finalise the issuance of Lagos State’s N137.3 billion 13 per cent 2021/2031 Fixed Rate Bond Series IV Bond Issuance, under the N500 billion fourth debt issuance programme.

“The conclusion of this process will bring to N377.715 billion the total value of bond issued from the Lagos State N500 billion debt issuance programme.

“From the moment I formally received my mandate in May 2019, the imperative to drive our THEMES agenda aggressively has been clear. In order to adequately kick-start the funding of our projects, we formally commenced this issuance process in April 2021.

“In line with the state’s vision to build a Greater Lagos, the proceeds of the Bond will be used to finance key infrastructure projects, primarily in roads and healthcare. These include the Lekki Regional Road, Rehabilitation of Ijeododo road and Rehabilitation of the alternative route to Admiralty Circle Toll Plaza.

“These projects will contribute to a better quality of living for our people, while also creating a more enabling environment for commercial and economic activity. There is no doubt — and we have seen this from previous interventions — that the multiplier social and economic effects will more than justify the cost of the investment.

“We applaud the Federal Ministry of Finance, PenCom and the Debt Management Office Nigeria, for their support and collaboration. Our appreciation also goes to the Securities & Exchange Commission.

“We equally thank the investing community for their sustained support of Lagos State and our efforts to improve the social and economic welfare of all residents in Lagos. We do not take for granted your enthusiastic response to our Bond offer.

“We will continue to uphold our commitment to remain the most responsible issuer in the Nigerian capital market.”

In another development, Sanwo-Olu yesterday inaugurated nine network of roads and a bridge expected to cater for 300,000 people in the Kosofe area of the state.

With a total length of 2.840km, the roads are to improve connectivity in the Kosofe area of Lagos mainland.

The governor said: “Today bears testimony to the fulfilment of our administration’s promise to ensure continuity of governance by completing projects that were inherited from the previous administration, especially those that are directly beneficial to the well-being of our people.

“In addition to initiating new projects, we have expended huge resources on the completion of several projects which cut across different sectors in all parts of the state.

“Soluyi Community is a strategic settlement with a fast growing population in need of infrastructural renewal. This prompted our decision to prioritize the completion of this network of roads, with a total length of 2.840km, including a bridge, which will serve a population of more than 300,000 people, within the Soluyi-Araromi-Ifako-Gbagada Communities.

“These projects exist as a testament to our administration’s resolve to continue to provide the necessary infrastructure for sustainable development, in every part of the state.

“With the completion of these projects, our administration has once again demonstrated the topmost priority that we accord to the welfare and well-being of the people of Lagos, in line with our Greater Lagos Vision, and the Traffic Management and Transportation Pillar of our THEMES Governing Agenda.

“The ever-increasing number of people living in Lagos, and the attendant rise in vehicular traffic volumes and axle loads are partly responsible for the issues we face regarding road infrastructure in the State. Our administration will continue to respond to this challenge by stepping up our efforts in the area of construction and rehabilitation of roads and highways, and the expansion of our transportation network, with renewed focus on our multimodal transport strategy.

“We can and will take some pressure off our roads by utilizing our waterways and by rail technology. This is why we are pushing ahead with determination on the Lagos Light Rail project, as well as the construction of jetties and deployment of boats and ferries across the State.

“I want to implore the Community Development Association of this area to immediately assume ownership of and responsibility for the judicious use of these projects/roads. You must care for them with devotion and dedication, and keep them clean, and the drainage free of waste, at all times.”

The Governor highlighted some of the benefits of the roads to include as an alternative route to the Third Mainland Bridge (TMB) and Apapa-Oworonsoki Expressway via the Third Axial underpass; to address the perennial environmental and infrastructural challenges among others.

Welcoming the audience, the Special Adviser to the Governor on Works and Infrastructure, Engr Aramide Adeyoye said, “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.”

According to her, prior to the project inception, the only access in and out of Soluyi Community, Gbagada, was via the ever- busy Ayodele Okeowo Road abutting Deeper Christian Life Bible Church.

“The attendant traffic gridlock arising from high vehicular volume during peak periods necessitated the provision of an alternative route to ameliorate the discomfort, residents around the area experience while also addressing environmental challenges, particularly flooding due to inadequate drainage system.”

Segun James

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