Lagos State has sold N47 billion naira ($154.50 million) of bonds maturing in 2023 to help finance basic infrastructure, Gov. Akinwunmi Ambode said in a statement on Saturday.
He said 16.5 per cent coupon was the first tranche of a N500 billion debt issuance programme approved by the state’s parliament in September.
The state had offered 60 billion naira of the bonds. Mr. Ambode said “despite the continued challenges in the economy and difficult market conditions …the state sold some 80 per cent of the bonds it offered at a 57 basis points spread to the sovereign.
“Lagos state government remains committed to improving the physical and social infrastructure base of the state …,” he said.
Lagos state in April agreed to pay off holders of an outstanding 167.5 billion naira bond before maturity to cut its interest payments after a plunge in oil prices slashed government revenues.
The state is home to the commercial hub of Africa’s most populous nation, a sprawling city of more than 21 million people which seriously needs infrastructure upgrades.
Lagos is the first state to issue a bond since the country’s recession in the second quarter of 2016.
It is also rare among Nigeria’s 36 states in generating around 70 per cent of its revenue internally from taxes.
Most of the country’s other states rely heavily on their share of federal oil revenues.