Lagos gets SEC approval for N87.5bn bond

Plans by Lagos State to sell a record amount of bonds have been approved by the Securities and Exchange Commission, Bloomberg News has reported.

The report said the lead book runner, Chapel Hill Denham, said in an e-mailed statement that SEC cleared the government to sell N87.5bn ($553m) of bonds maturing in November 2020, the second and final tranche of a N167.5bn issuance programme that started in November last year.

Lagos’ population probably rose 29 per cent since 2006 to about 22 million people, according to the local government. It has the smallest inland area and is the most densely populated of Nigeria’s 36 states.

The Governor Babatunde Fashola administration is investing in infrastructure to meet the needs of a population it estimates is increasing three per cent a year. About 70 per cent of Lagosians live in slums, according to London-based Amnesty International.

The bond “will contribute to the completion of ongoing infrastructure projects to enhance the provision of social services aimed at improving the living standards of Lagosians,” the state Commissioner for Finance, Mr. Ayo Gbeleyi, said in the statement.

The proceeds will be used to fund projects including the Lagos-Badagry Expressway, a metropolitan railway, mother-and-child care centres and to buy back the entire shareholding of the Lekki Concession Company, which was set up to build roads in the region, according to the statement.

Book building for the notes will open next week with targeted investors including pension funds, banks, money managers and high-net-worth individuals, Chapel Hill Denham said in the statement.

“This is the largest bond that Lagos State has ever sold, but we still believe it will be oversubscribed,” Samir Gadio, a London-based emerging-markets strategist at Standard Bank Group Limited, said by e-mail on Tuesday.

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