Lagos DMO to secure fresh N185bn bond to fund projects

The Lagos State Debt Management Office (DMO) on Thursday said it is in the process of securing another bond in the series to the tune of N185billion.

This is expected to fund various projects and replace the recalled bonds at a lower coupon rate, Olujimi Ige, permanent secretary, Lagos DMO, said at the second edition of the management retreat in Lagos.

He said the state government has also recalled the N46.3billion and N6.9billion bonds under the programme 2 series.

This early redemption has immediately reduced the State’s total debt obligation and the average cost of debt service.

Significantly, the State has raised unique financing for the Red Line and Blue Line Rail Projects which is ongoing and due for completion in 2023.

As a testimony to the credibility of Lagos State, he said the N100billion bond that was issued in January 2020 was listed early this year on the FMDQ Exchange, NG Exchange.

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This has also given greater visibility to the State, ensured transparency as well as increased the Bond Holder’s confidence.

It has also enhanced the state’s ratings and alerted investors to value our bond issuance programme.

As further testimony to the state’s credibility, he said the rating Agencies: – FITCH, GCR, and AUGUSTO had accorded the State A+ and B+ respectively.

Ige said the retreat was necessary in order for the agency to re-strategize, refocus and re-energize the staff so as to address issues and challenges especially with the advent of the global pandemic.

He recalled that at the last retreat, it was agreed and also necessary to align management collective responsibilities to key into governor’s vision of ensuring that Lagosians have the impact of good governance in the state.

“This we have done through our activities over the last one year by ensuring that Bonds and loans were judiciously utilized, amortization schedules were adhered to, interest rates are favourable, Bonds were recalled and reissued, facilities were renegotiated for lower rates, other project financing methods were duly exploited”.

“The world is moving at a rapid pace and we must move with it. Lagos State as the melting pot of all tribes and religions must sustain its pride of place in the World,” he said.

In June 2021, the Lagos State House of Assembly approved Governor Babajide Sanwo-Olu’s request of N85 billion special dispensation for bond redemption as well as N85 billion for bridge loan for a quarter.

The move was pursuant to the approval of bonds, loans, and other security laws of Lagos State 2015 and comes at 9.25percent per annum to the bond financing programme.