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LAGOS REDEEMS BONDS, SEEKS NEW ISSUANCE

The Lagos State Government recently completed the successful call and redemption of some of its Bonds earlier than the due date. They include the N46.37Billion bond at the rate of 16.75% interest and the N6.91 billion bond at the rate of 15.60% interest, which were issued under the N500 billion Bond Issuance Series Programme. Also, the N47 billion bond with an interest rate of 16.5%, due in December 2023, will be called and redeemed (fully paid) in June 2021.

In a statement issued recently by the Lagos State Debt Management Office, the Permanent Secretary, Mr. Olujimi Ige, explained that in December 2016 and August 2017, the State issued the N47 Billion, N46.37 Billion and N6.911 Billion Bonds respectively, noting that the Bonds have a seven-year tenor that can be called-in by the issuer at par after three years on any interest payment date in line with the Bond Trust Deed.

He disclosed further that the interest and principal was paid on the due date of 11thFebruary 2021, while the N47bn 16.5% interest will fall due for call up in June 2021.

While noting that the N47bn (16.5%) interest will be due for call-in by June 2021, Ige stated further that the State has opted to call the above-listed Bonds in order to take advantage of low yield environment in the Money and Debt markets while making significant savings in overall costs of debt service.

His words: “It is pertinent to state that the Lagos State Executive Council passed the resolution to repay its series II Bonds, while the call notice to Bondholders was published on Tuesday, January 12, 2021, being 30 days prior to the date of the call exercise in line with the Bond Covenant”.

The Permanent Secretary also revealed that the State has started the process of new Bond Issuance at a lower coupon to replace the called up Bonds.

Recall that last November, the State Government fully paid up the N87.5Billion Bond (Programme 2 Series 2), issued on November 26, 2013, at a coupon rate of 13.5% and a tenor of seven years.

 

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