Press Releases

Lagos State N50 Billion Fixed Rate Bond Oversubscribed By 249%

Apr 19, 2010 - Lagos State Government on Monday held the Completion Board Meeting of the N57,500,000,000 Lagos State Fixed Rate Bond (Series 2) 2010/2017 issued under the N275,000,000,000 State Debt Issuance Programme with the application receiving bids in excess of 249percent.

Speaking at the verification of questionnaire and signing of the documents for the Bond, the State Governor, Mr Babatunde Fashola (SAN) who was represented by his Deputy, Princess Sarah Sosan said the second series of the N275B bond has recorded the highest level of participation in any Bond issue in the capital market.

Said he: “This is the second of such gatherings in the tenure of this administration. When a similar meeting was convened in December 24th, 2008 for the purpose of signing the documentation for the Tranche 1 issuance, there was much anticipation in our financial markets. That public offer received a tremendous response from investors both individuals and institutional and recorded an unprecedented 117.93% level of subscription. Applications in respect of the N50billion Tranche 1 offer amounted to N58,966,760,000”.

According to the Governor: “The result of the just concluded bond offering is a clear indication that the investing public is keen to partner with the government in the ongoing transformation. The tranche 2 Bond issuance of the required N50,000,000,000 was sold via a Book Build method (solely to institutional investors and other qualified buyers). On April 7, 2010 when the Order Book opened, our Book Runners(led by Chapel Hill Denham Management Limited) were mandated to raise N50Bilion. At the close of the Order Book on April 13, 2010 the Book Runners had received bids in excess of 249%”, Governor Fashola explained.

The Governor added that with the completion board meeting, the State has scored many firsts such as being the first to establish a Bond Issuance Programme, the first to issue a bond without any underwriting arrangements as well as being the first to undertake successive bond issuances during the tenure of the same administration.

Governor Fashola also said Lagos State is the first to issue a bond without an Irrevocable Standing Payment Orders (ISPO) and the first to undertake an offering by way of a Book Build.

“Your administration will continue to observe the strictest standards of fiscal responsibility and take extremely seriously our responsibility as managers of the State’s resources; regardless of whether they are financial, human, mineral, agricultural or fall into other categories”, he stated.

The Lagos State Governor explained that different projects are being undertaken with the Bond proceeds with a major one being the upgrading of the Lagos- Badagry Express Way into a 10-lane highway featuring pedestrians walkways, bus routes and a rail line which is already at an advanced stage.

He reiterated that with the Bond proceeds, the potentials of the State water transportation project will be maximized as work is already ongoing in ferry terminals at Ikorodu, Badore and Osborne.

The Governor also disclosed: “Our other plans to develop Lagos include funding of Light Rail Transit Scheme. There are other capital intensive projects that have been earmarked for execution by this administration to develop Lagos into a global city and cater for the welfare of the people”.

He expressed appreciation to all the Issuing Houses, financial institutions and State lawmakers for enacting the enabling law of Capital Raising Programme without which the State would not have gone this far in the provision of essential services.

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 representative of the State Government.

Prominent among those who attended the event were the Commissioner for Finance, Mr Rotimi Oyekan, the Attorney General and Commissioner for Justice, Mr Supo Sasore (SAN) other members of the State Executive Council, representatives of the Issuing Houses, stockbrokers, receiving banks and joint trustees to the State on the Bond.