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Kwara to float N23bn bond as states push for infrastructure


News » Health and Beauty
Nigeria

August.07.2014

The Kwara State government is set to float a N23 billion bond as it pushes for further infrastructure development.

Governor Ahmed Abdulfatah said information from the Nigerian capital market indicates that the market is excited and reinvigorated in their interest to subscribe to the Kwara State proposed bond.

He expressed confidence that the new facility when obtained will also be judiciously utilised and serviced by the state government in line with established tradition.

The Kwara State government has also redeemed the N17 billion bond obtained in 2009 for infrastructural development projects. Governor Ahmed, who announced the redemption during a meeting with stakeholders in Ilorin, expressed satisfaction that the state had met all its obligations under bond.

He said the N17 billion was utilised for the Kwara State University, Malete; the International Aviation College, Harmony Advanced Diagnostic Centre, the Ilorin Township Stadium, Ilorin Water Reticulation Project (phase one) as well as road and electrification projects across the state.

Also speaking at the occasion, Yomi Ogunshola, the senior special assistant to the governor on investment promotion and strategy, said over the life of the bond, the state government never defaulted in the payment of coupons to bond holders on June 15 and December 15 of every year.

Ogunsola said the 14% fixed rate 5-year bond maintained an issue rating of A and issuer rating of Bbb issued by Agusto and Co rating, a pan-African rating agency. According to him, this signifies the superior quality credit profile of the Kwara State government.

Kwara State is moving to float its bond as Nigerian sub-nationals seek funding to boost infrastructure spending.

States are planning to pay for upgrades in infrastructure such as roads and railways, while also seeking to boost spending to end power cuts and sustain growth, forecast to be 6.7 percent this year, according to the World Bank.

The domestic debt stock outstanding as at September 2013 for state or sub-national bonds was N595.5 billion ($3.72 billion), according to data from the DMO.

Osun State sold N10 billion ($61 million) of Islamic debt in September, the first state in the country to sell sukuk. Lagos State issued an N87.5 billion bond with a 13.5 percent coupon in November, the biggest bond sold by the state.

Most of the 36 states in Nigeria, the continent’s biggest oil producer, are targeting debt sales this year, Abraham Nwankwo, director general of the Debt Management Office, which manages the country’s bond issuance, said in a January 15 interview in Abuja.

Article Credit: Businessdayonline

Updated 3 Years ago
 

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Tags:     Kwara State     Governor Ahmed Abdulfatah     Yomi Ogunshola     Abraham Nwankwo    

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