By Aduragbemi Omiyale
The series II of the N20 billion Sukuk issued by the Lagos State government is closing today, Thursday, May 18, 2023.
The exercise commenced on Tuesday, May 16, 2023, and is under the state government’s N1 trillion Sukuk issuance programme.
The 7-year Islamic bond is being sold to investors at about a 14 per cent coupon, with proceeds to be used to fund the construction/rehabilitation of the Awoyaya section of the Eti-Osa Lekki-Epe Expressway.
It is almost certain that the facility would be tolled after completion like the others in the environment to recoup the funds used to execute the project.
This is because, upon completion, the state government will lease, maintain and purchase the road and make rental and purchase payments.
According to information gathered by Business Post, the minimum subscription for the series II Sukuk was N10 million and in multiples of N1,000 thereafter.
The bond is backed by an Irrevocable Standing Payment Order (ISPO) for monthly deductions from the statutory allocation of the state government from the nation’s purse.
The information showed that the state had secured an ISPO of N200 million monthly against the state’s monthly statutory allocation, and the originator will transfer N55.64 million from the state’s statutory allocation in the first two years of the issuance and N293.03 million from the third year till maturity.
The interest is expected to be paid to investors after two years of the exercise, and the possibility of the state government defaulting in repayment is very slim.
Lagos is the commercial capital of Nigeria and is the state with the highest Internally-Generated Revenue (IGR) in the country, boasting over N50 billion monthly.