Lagos State on Monday raised N85.14 billion in 7- and 10-year bonds to fund infrastructure and environmental projects, its commissioner for finance, Akinyemi Ashade, said on Monday.
The bond consists of 46.37 billion naira 7-year debt at a 16.75 percent rate and 38.77 billion naira via a 10-year paper with 17.25 percent , Ashade said in a statement.
The issue is the third tranche of a N500 billion debt programme approved by the state Assembly last year and was sold through book building, Ashade added.
The state sold N60bn worth of 5-year bonds last year, the first tranche of the debt programme planned to be issued over the next two to five years.
“We value the reputation we have earned as the most responsible issuer in the Nigerian capital markets and thank everyone who has worked with us to deliver a successful outcome,” Ashade said.
Lagos is the commercial hub of Nigeria, a sprawling city of more than 21 million people which badly needs infrastructure upgrades.
Stock brokers said the state paid higher interest than the inflation rate on the bond in a bid to lure investors into buying the debt.
Nigeria’s annual inflation was 16.1 percent in June, while data for July is being delayed by the National Bureau of Statistics (NBS) till Aug. 28.
The federal government paid 16.25 percent on its 10-year bond last month.
Most states in the countrdepend on their share of federal oil revenues but Lagos has explored the debt market to fund its developmental projects.