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Lagos gets SEC approval to issue N87.5bn bond

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Lagos — Lagos State Government, yesterday, said it had obtained the approval of the Securities and Exchange Commission, SEC, to issue $552.05million (N87.5 billion) bond maturing in 2020 to fund infrastructure projects.

The debt, which will be opened with a book build, is the second and final tranche of a N167 billion debt issuance programme launched in November 2012.

“The bond will contribute to the completion of on-going infrastructure projects to enhance the provision of social services aimed at improving the living standards of Lagosians,” said state finance commissioner, Ayo Gbeleyi in a statement.

It will be recalled that the Lagos State House of Assembly recently approved the buy-back of the concession right from Lekki Concession Company, LCC, paving way for the government to take over the road and toll collection.

The Lekki-Epe Expressway has a contract sum of N50 billion while the LCC has 30 years concession rights under the Build, Operate and Transfer, BOT, system, that will enable the company recoup its investment plus interest.

The N87.5 billion bond to be floated in the capital market will enable the state pay off LCC and take over the construction and management of the road and collect toll on it as well as address shortfall in the state’s Internally Generated Revenue, IGR.

The Lekki-Epe Toll gate
The Lekki-Epe Toll gate

According to Governor Fashola in a letter to the State House of Assembly for the approval and an amendment to the Appropriation Act 2013, “the proposal for further amendment is largely predicated on the need to fund the acquisition of existing concession rights and toll revenue benefits held by the LCC, the concessionaire for the Eti-Osa-Lekki-Epe expressway.

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