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Lagos Raises N135 bn Hybrid Bonds to Finance Key Infrastructure Projects

Lagos State has announced that it has successfully issued N134.81 billion in bonds from the nation’s capital market in a bid to finance the delivery of key infrastructure projects.

Governor Sanwoolu at the signing ceremony

The bonds issued consist of N115 billion in 10-year bonds and N19.815 billion raised through Ijarah Lease Sukuk bonds.

The 10-year bonds, which were the fourth issuance under the Debt and Hybrid Issuance Program, attracted a yield of 15.25 percent, while the first Shariah-compliant instrument to be issued by the state attracted a return of 14.675 percent.

The state governor, Babajide Sanwo-Olu, presided over a ceremony on Tuesday where the state government, issuing parties, and trustees signed transaction instruments for the first sets of allotments in the N1 trillion debt and hybrid issuance program.

The Attorney-General and Commissioner for Justice, Moyosore Onigbanjo, formally read out the resolutions of the State Executive Council adopting the issuance of the two bonds before the signing of the instruments by the parties.

Sanwo-Olu described the development as “another significant milestone” recorded by his administration in delivering the required infrastructure that would catalyze economic growth across the state.

The two bond issuances, he said, would provide the impetus for his government to further drive its development agenda in critical sectors of the state.

“As we renew our mandate in the coming days, these two issuances will provide the impetus for my administration to further drive our THEMES agenda. Proceeds from the bond and sukuk will enable various ministries, departments, and agencies, including the Ministry of Energy and Mineral Resources, the Ministry of Agriculture, the Office of Drainage and Water Resources, the Ministry of Works and Infrastructure, the Ministry of Education, the Ministry of Health, and the Ministry of Waterfront and Infrastructure, to execute respective projects that have been pre-inspected by the Securities and Exchange Commission and issuing houses.

“Some of the projects include the massive overhaul of 33 public schools in the Itolu area of Ajegunle and ongoing road infrastructure projects on the Lekki-Epe corridor.

“A significant part of the funds will be used for drainage works and sea and lagoon embarkment to protect the environment from climate issues. In health, we are using part of the proceeds to kick off our Infectious Disease Research Center at the Infectious Disease Hospital in Yaba because of the experience we had with coronavirus.

“We are building agricultural capabilities to feed our people. Part of the proceeds are going to all the activation we have been doing around constructing major food markets,” Sanwo-Olu said.

Sanwo-Olu said the proceeds from the issuances would not only drive infrastructure development but also stimulate economic growth, foster job creation, and enhance the quality of life for the residents.

The Governor thanked the investors’ community for believing in “tremendous opportunities” in Lagos, reiterating his commitment to discipline and transparency in the deployment of the funds.

A lead issuing house, Chapel Hill Denham, said Lagos raised the N134 billion bond within 14 days of issuance, saying the oversubscription was an indication of investors’ confidence in the state.

Its Managing Director, Kemi Awodeyin, said the issuing house remained disciplined and committed to Lagos in its drive to improve economic growth.

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