Lagos restructures N167.5b bonds

Lagos State government has restructured its N167.5 billion bonds, potentially saving at least N40 billion by paying off the debt more quickly.
However, there is no information on whether the loan has been fully liquidated or when it will be fully paid back.
A statement issued by the state government quoted Governor Akinwunmi Ambode as saying that the restructuring was approved by the Securities and Exchange Commission (SEC) after an agreement was reached with bond creditors.
“The transaction will generate savings in excess of N40 billion ($201.01 million) for the state over the next five years,” Ambode said.
The bonds are an N80-billion seven-year bond maturing in 2019 and an N87.5 billion bond due to be repaid in 2020.
Coupons on the bonds would remain unchanged at 14.5 per cent and 13.5 per cent respectively.
Finance Commissioner, Akinkunmi Mustapha, said the restructuring was done through domestic capital markets and “was approved by 99.6 per cent of the state’s bondholders at an extraordinary general meeting.”
He explained that the restructuring of the state’s Programme II, Series 1 and 2 Bonds was approved by the SED, after approval by bondholders.
“This restructuring, completed entirely through domestic capital markets, once again underpins the strength of the Lagos State credit story,” Mustapha said.
“Aside the significant cash savings generated, it also creates additional borrowing capacity to enable the state continue its investments in physical, economic and social infrastructure.”
According to him, funding through the capital market has been responsible for much of the progress made in the state in the last 16 years.
Chapel Hill Denham acted as the financial adviser to the state government on the restructuring transaction.
The federal government approved a $200 million loan from a World Bank agency in January to develop infrastructure in Lagos State.