The Book Building process of the N60 billion Bond issuance programme by the Lagos State government commenced Tuesday, December 13, and would end on December 22, 2016.
Lagos State government is offering investors for subscription up to N60 billion bond under it N500 billion Debt Issuance Programme.
The 7-Year Fixed Rate Bond due 2023 will be listed on the platforms of FMDQ OTC Securities Exchange (FMDQ) and the Nigerian Stock Exchange (NSE), according to the offer documents seen by BusinessDay.
Book building is a systematic process of generating, capturing and recording investor demand for securities during their issuance process, in order to support efficient price discovery.
Chapel Hill Advisory Partners Limited is the Lead Issuing House/Bookrunner, Futureview Financial Services Limited, Radix Capital Partners Limited, SFS Financial Services Limited, Stanbic IBTC Capital Limited, United Capital plc, Union Capital Markets Limited, Vetiva Capital Management Limited, and Zenith Capital Limited are the Joint Issuing Houses/Bookrunners.
Proceeds from the Naira-denominated Fixed Rate Bonds will be channelled into: Schedule of Health Sector Projects (N10.035bn) and Schedule of Education Sector Projects (N9.008bn).
Also, the bond proceed will be channelled into the Lagos Enterprise GIS Upgrade and Integrated Land Administrative and Automation System Project (N13.218bn); Pen-Cinema Agege Fly-over project (N8.979bn); Channelisation of Water Transport Routes; Construction of Terminals (N6.980bn); Construction and completion of Freedom Road and Admiralty Way (N3.990bn), and Construction of Road Networks in Epe and Lekki axis (N5.986bn).
The Series-I Bond obligations will be serviced from the Consolidated Debt Service Account (CDSA) and an Irrevocable Standing Payment Order (ISPO). The Issuer will appropriate the sum of N807.885 million from the Consolidated Debt Service Account (CDSA), immediately upon the issuance of the Series-I Bond for purposes of the repayment of the interest obligations under the Bond.
The CDSA is a dedicated internally segregated savings account established under the provisions of the Bonds Law, for purposes of servicing all of Lagos State’s public debt. The Bonds Law provides for the CDSA to be created by the Lagos State Government into which a minimum of 15% of the State’s Internally Generated Revenue (IGR) will be deposited on a monthly basis.
In addition, Lagos State shall obtain an Irrevocable Standing Payment Order (ISPO) in the sum of N1 billion for purposes of servicing the interest and principal repayment obligations under the Bond. The ISPO will be effective from November 2019.
Joint Solicitors to the Issuer is Simmons Cooper Partners Templars Solicitors. Solicitor to the Issue is Solola Akpana & Co., and Banwo & Ighodalo.
Solicitor to the Trustees is Jackson, Etti & Edu. Joint Trustees to the state is ARM Trustees Limited Coronation Trustees Limited, STL Trustees Limited Radix Trustees Limited, Sterling Asset Management & Trustees Limited, and United Trustees Limited. The registrar is United Securities Limited.
