Lagos State has raised N85.14 billion ($271 million) in seven and 10-year bonds to fund infrastructure and environmental projects, its Commissioner for Finance, Akinyemi Ashade has said.
According to Ashade, the bond consists of N46.37 billion seven-year debt at a 16.75 percent rate and N38.77 billion via a 10-year paper with 17.25 percent interest.
The issue is the third tranche of a N500 billion debt programme approved by the state House of Assembly last year and was sold through book building, Ashade said.
The state sold N60 billion worth of five-year bonds last year, the first tranche of the debt programme planned to be issued over the next two to five years.
“We value the reputation we have earned as the most responsible issuer in the Nigerian capital markets and thank everyone who has worked with us to deliver a successful outcome,” Ashade said.
Lagos is home to the commercial hub of Africa’s biggest economy, a sprawling city of more than 21 million people which badly needs infrastructure upgrades.
Stock brokers said the state paid higher interest than the inflation rate on the bond in a bid to lure investors into buying the debt.
The country’s annual inflation was 16.1 percent in June, while data for July is being expected from the National Bureau of Statistics (NBS) till Aug. 28.
The federal Government paid 16.25 percent on its 10-year bond last month.
Most states in the country depend on their share of federal oil revenues but Lagos has diligently pursued its Internally Generated Revenue (IGR) and complemented it with the debt market to fund its developmental projects.