Governor Babajide Sanwo-Olu of Lagos State on Tuesday signed ₦134.815 billion bonds in a bid to deliver key infrastructure projects in the state.
Speaking at the signing ceremony, Sanwo-Olu said that one of the projects the proceeds from the bonds were meant for, was the total overhaul of 33 public schools in the Tolu Complex area of Ajegunle (Olodi Apapa).
"The state issued a 10-year tenure bond value at ₦115 billion at 15.25% in its fourth issuance under the Debt and Hybrid Issuance Programme duly approved by the State House of Assembly.
"The second instrument is a seven-year tenure bond valued at ₦19.815 billion at 14.675% Fixed Return Forward-Ijarah Lease Sukuk, billed to mature by 2030, which marked the first shariah compliant instrument to be issued by Lagos."
He said that the development was another significant milestone recorded by his administration, in delivering required infrastructure that would catalyse economic growth across the state.
The governor said that the two bond issuances would provide the impetus for his government to further drive its development agenda in critical sectors of the state.
"As we renew our mandate in the coming days, these two issuances will provide the impetus for my administration to further drive our THEMES agenda.
"Proceeds from the Bond and Sukuk will enable various ministries, departments and agencies, including the Ministry of Energy and Mineral Resources, Ministry of Agriculture, the Office of Drainage and Water Resources, Ministry of Works and Infrastructure, Ministry of Education, Ministry of Health, and Ministry of Waterfront and Infrastructure, to execute respective projects that have been pre-inspected by the Securities and Exchange Commission and issuing houses.
"Some of the projects include a massive overhaul of 33 public schools in the Tolu area of Ajegunle and ongoing road infrastructure projects on the Lekki-Epe corridor.
"Significant part of the funds will be used for drainage works, sea and lagoon embankment to protect the environment from climate issues.
"In health, we are using part of the proceeds to kick off our Infectious Disease Research Centre at Infectious Disease Hospital in Yaba, because of the experience we had with coronavirus.
"We are building agricultural capability to feed our people. Part of the proceeds is going to all the activation we have been doing around constructing major food markets," he said.
Sanwo-Olu said that the proceeds from the issuances would not only drive infrastructure development, but also stimulate economic growth, foster job creation, and enhance the quality of life for the residents.
He thanked the investor's community for believing in "tremendous opportunities" in Lagos, reiterating his commitment to discipline and transparency in the deployment of the funds.
The Commissioner for Finance, Dr Rabiu Olowo, said that the Sanwo-Olu administration made stand-out financing decisions that would continue to enhance the state’s ability to deliver needed infrastructure.
Olowo said that the issuances demonstrated Lagos’ status as a "Category A Issuer" and a proof of the trust that investors had in the state’s ability to judiciously deploy proceeds to deliver on government’s projects.
He said that the transaction reflected the resilience and depth of the domestic debt capital market, which Lagos had been able to rely on in its quest to build a Greater Lagos for generations to come.
"Aside from democratic process, the validity of a government’s credibility is when discerning, shrewd business people, investors willingly put their money to support the development agenda of a state," the commissioner said.
A lead issuing house, Chapel Hill Denham, said Lagos raised the ₦134 billion bond within 14 days of issuance, saying the oversubscription was an indication of investors’ confidence in the state.
The Managing Director, Chapel Hill Denham, Kemi Awodeyin, said that the issuing house remained disciplined and committed to Lagos, in its drive to improve economic growth.
Hajara Adeola of Lotus Financial Services, the lead issuing house which facilitated the Sukuk instrument, praised Lagos Government for building faith in non-interest finance.