Lagos state on Monday raised 85.14 billion naira ($271 million) in 7- and 10-year bonds to fund infrastructure and environmental projects, its commissioner for finance 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 interest, Akinyemi Ashade said in a statement.
The issue is the third tranche of a 500 billion naira debt programme approved by the state parliament last year and was sold through book building, Ashade said.
The state sold 60 bln naira 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 state is home to the commercial hub of Africa’s biggest economy, 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.
Nigeria’s government paid 16.25 percent on its 10-year bond last month.
Most states in Nigeria depend on their share of federal oil revenues but Lagos has explored the debt market to fund its developmental projects.