Thursday, January 30,2020 / 02:57 PM / by Kehinde Olatunji of The Guardian / HeaderImage Credit: Twitter, @followlasg

• Sanwo-Olu: 'It's a newjourney toward developing Lagos'

Lagos State Government has opened a new chapter in itsstride towards attaining self-sustenance in finance and governance. GovernorBabajide Sanwo-Olu on Wednesday, signed documents for the issuance of N100.33billion bond, which the State raised from capital market to fund infrastructureand pressing capital projects.

At a signing ceremony held at the Banquet Hall at theState House in Alausa, Governor Sanwo-Olu, investors and issuing parties putthe final ink on the over-subscribed Series Three Bond Issuance of N100billion, which was issued and raised by the State under its N500 billion ThirdBond Programme approved four years ago.

The Governor, who was visibly excited by the financialintervention, declared the moment as "historic and new journey" for the Statein its drive to provide requisite infrastructure to catalyse its economy,saying it was the largest bond programme ever embarked on by any sub-nationalentity in the country.

Sanwo-Olu said: "We have embarked on a new journeythat is not meant to serve our personal interest, but to activate moreprosperity for our dear Lagos and give our people the hope for better tomorrowwe all dreamed. When we came into Government, we made commitment to allLagosians that we are coming to pursue and implement an agenda that will buildour capacity to achieve 'Greater Lagos' we all will be proud of.

"Today, I am standing in from you all to say we arewriting the financial history of Lagos in another chapter and it will bringgood dividends to all residents. With this N100 billion bond, we will ensurethat all Lagosians feel the direct impact of this intervention in their homesand on the roads. We are bringing new infrastructure and repairing the existingones, including bridges and hospitals. We are going to renovate schools andbuild new ones for our children; slums will be regenerated and pressingenvironmental issues will be solves. We are going to make people feel theessence of governance."

Sanwo-Olu recalled that the effort to raise the bondstarted some three months ago with a simple discussion with professionalpartners led by Chapel Hill Denham. He observed that the State almost missedthe opportunity, as the statutory period recommended by Securities and ExchangeCommission (SEC) to raise such bond was closing when the State started pushingfor the bond issuance.

The Governor said the partners staked their time andenergy for the State to secure essential requirements to access the capital forthe bond. Within a period of three months, Sanwo-Olu said the partners helpedLagos to restructure its balance sheet and reduce the State's interest expenseby N17 billion, which gave Lagos the opportunity to raise the bond from thecapital market.

"Less than three months down the line, we arecelebrating the biggest sub-national bond issuance today and the team ofpartners has also helped us to restructure our entire balance sheet. We havebeen able to revert the entire borrowing of Lagos from very high rate toacceptable numbers. The team has also helped us to reduce interest expense byN17 billion, which made it easy for us to approach the financial market."

Sanwo-Olu promised not to betray the confidence ofinvestors that subscribed to the bond, pledging that the funds would bedisbursed strictly to finance infrastructural projects required to boost theState's economy.

Commissioner for Finance, Dr. Rabiu Olowo, said theState accelerated the bond programme in response to the need to close hugeinfrastructural gap" in the face of limited financial resources available tothe State. He said the State Government took the advantage of favourbaleinvestment climate in the capital market to issue the "Series Three" of itsbond programme to raise the money.

"The cost of inaction would have been huge and itwould mean over 20 million Lagosians would be underserved in many areas. Itwas, therefore, with this mandate that Lagos Government sought the support ofprofessional advisers to access the capital market in December 2019.

"It is fulfilling to note that, despite hurdles wefaced, we have been able to achieve the target we set for ourselves. In fact,we exceeded the target. I want to assure all residents that the proceeds fromthis bond issuance programme will be judiciously utilised in line with ourT.H.E.M.E.S agenda to achieve a 'Greater Lagos'."

Managing Director, Chapel Hill Denham, Mr. BolajiBalogun, described the bond as a "jumbo" for the State, stressing that thesupport given to Lagos Government by the capital market was unprecedented.

Balogun noted that Lagos issued a bond of N100billion, adding that the Minister for Finance granted the approval for theprocess while in transit.Lagos, he said, must accelerate investment ininfrastructure, adding that such would create an incredible multiplier effecton economic activities and give the State financial buoyancy. Sustainedinvestment in infrastructure, Balogun said, remained the only way to achieveirreversible development and lift millions of people out of poverty.

A total of 315 bids were submitted during the offerperiod for the Lagos Series Three Bond Issuance, putting the value of the totalbids at N196.48 billion. A total of 208 bids, which amounts to N100.33,qualified under the terms of the offer at the clearing price of 12.25 per centper annum.

Credit:

Thepost Lagos Raises N100bn Bond toFinance Infrastructure first appeared in The Guardian on January 30, 2020

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