The Lagos State Government has restructured its N167.5 billion programme II, series 1 and 2 bonds.
Akinkunmi Mustapha, the state commissioner for Finance, said in a statement on Wednesday that the restructuring which has been approved by the Securities and Exchange Commission (SEC) last week, was achieved through the finalisation of a process through which the state reached an agreement with its bond creditors on accelerating repayment terms.
According to Mustapha, the transaction will generate savings in excess of N40 billion for the state over the next five years. This arrangement, the commissioner said, had been approved by 99.6% of the state’s bondholders at an extraordinary general meeting which held recently, with Chapel Hill Denham acting as financial adviser to the state government.
“We thank all our bond creditors for their continued support of the state government in a difficult market environment. This restructuring completed entirely through domestic capital markets, once again underpins the strength of the Lagos State credit story.
“Aside the significant cash savings generated, it also creates additional borrowing capacity to enable the state continue its investments in physical, economic and social infrastructure.
“Much of the significant progress in Lagos State over the last 16 years can be attributed to funding through the debt capital market.
Our bondholders’ support of this restructuring confirms the level of confidence the market has in the current administration and Lagos State did not partake in the recent bail-outs provided either by the Federal Government DMO or the Central Bank of Nigeria (CBN),” said Mustapha.
JOSHUA BASSEY
