27th November, 2013
Lagos State Government on Wednesday held a Completion Meeting for its N87.5 billion Programme 2 Series 2 Bond rounding off its N167.5 billion Issuance Programme. The offer recorded a stellar 139percent total subscription of N121.72 billion which the State did not accept given the limitation of the programme size and the State’s disciplined approach to financial management
The Bond, which represents another landmark by the State given that it is the largest Bond Issuance ever completed by a sub-national in the history of the Nigerian capital markets, cleared at a coupon of 13.5 per annum.
Speaking at the Completion Meeting which took place at Lagos House, Ikeja, the State Governor, Mr Babatunde Fashola (SAN) said he felt truly proud and vindicated by the show of confidence of the investing public, stating that the latest issuance represented a closing down of the 6 year old N275 Billion debt issuing Programme of the State which was aimed at satisfying the needs of the 21 million residents of Lagos and allowing them achieve their dreams.
“The closure of this facility takes us to the end of that Debt Issuance programme. We started first with N50Billion, then N57Bilion, N80Billion and closing it now with an N87Billion Bond”, he stated.
The Governor stressed that despite the fact that the Bond issuance recorded an offer of N121.7 Billion; the State Government cannot take the excess and will limit herself to the N87.5Billion which is what her resources and plans can support and pay back.
He expressed delight that all of the investments are locally raised saying it is one of the strongest statements of self belief that Nigeria can send to the world and expressed the hope that the Bond issuance will not end with Lagos.
“It is a statement of confidence that is rooted in hope and belief. In the fullness of time, other states will become deserving of this kind of investment because the projects we commit them to will last beyond the tenure of our Government”, he added.
Speaking earlier, the Vice Chairman of the Managing Partner of Chapel Hill, Mr Bolaji Balogun commended the State Government for its bold initiative in the market adding that the issuance represents the largest single issuance ever by any sub national government.
He added that even when the State issued an N80Billion Bond last year, it was also the largest.
Also speaking at the historic occasion, Finance Commissioner Ayo Gbeleyi said, ‘’we are quite pleased with the level of subscription as it validates Lagos State’s reputation as a responsible issuer in the capital markets. Additionally, it shows the level of support and confidence placed in the administration of Mr. Babatunde Raji Fashola (SAN) and its commendable efforts to improve the quality of infrastructure within the State in order to foster development, sustainable economic growth and the eradication of poverty for the overall well-being of the residents of Lagos State. The proceeds of this issuance will further add fillip to the vision of making Lagos State Africa’s model megacity and global economic and financial hub”.
The Bonds, concluded at such a competitive coupon of 13.5% at this point in time, given the current money market conditions with Monetary Policy Rate (MPR) retained at 12% and recent increase in Cash Reserve Ratio (CRR) from 12% to 50% for public sector deposits, amongst others further demonstrates the strong commitment of Banks and Institutional Investors like Pension Fund Administrators (PFAs), Insurance Companies and Fund Managers to the laudable programmes of the Administration.
Highpoints of the Completion Board Meeting were the presentation of Debt Issuance Programme Documents to all the representatives of the State Government and the eventual signing of the documents after the verification of Issuance questionnaire by the representatives of the State Government.
Prominent among those who attended the ceremony were the Deputy Governor, Hon (Mrs) Adejoke Orelope-Adefulire, the Chairman of the House of Assembly Committee on Finance, Funmi Tejuosho, the Attorney General and Commissioner for Justice, Mr Ade Ipaiye, members of the State Executive Council, representatives of the Issuing Houses, stockbrokers, receiving banks and joint trustees to the State on the Bond.