Lagos Freeze Zone Company raises N10.5 billion in 20-year infrastructure bonds

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Darasimi Adebisi

Lagos Free Zone Company (LFZC), the first free zone in Nigeria with a fully integrated deepwater port, has successfully issued N10.5 billion of Series 1 guaranteed fixed rate corporate infrastructure bonds to 20 years maturing in 2041 as part of a 50 billion naira debt issuance program.

LFZC is the infrastructure development subsidiary of Tolaram, the Singaporean conglomerate with more than 45 years of presence in Nigeria and business interests in consumer goods, infrastructure and the fintech space.

Backed by an irrevocable and unconditional guarantee from InfraCredit, LFZC Series 1 Bond is assigned a long-term credit rating of “AAA” by Agusto and Co. and GCR, reflecting the highest degree of creditworthiness for these bonds. The Series 1 bond, a 20-year guaranteed fixed rate bond, was oversubscribed by institutional investors, including eleven national pension funds, two insurance companies, banks and high net worth individuals (HNIs). The transaction is the first 20-year non-FGN bond issue in the Nigerian debt capital market and the first infrastructure bond approved by the Securities and Exchange Commission (SEC) for the development of an industrial hub.

Commenting on the transaction, LFZC Chief Financial Officer (CFO) Mr. Ashish Khemka said: Domestic capital for infrastructure development in Nigeria. The response to this bond program further strengthens our commitment to realizing our vision and thereby improving Nigeria’s competitive positioning through our continued focus on the parameters of ease of doing business. LFZ further highlights Nigeria as a major industrial hub on the West African coast and is ideally oriented in anticipation of the impending single market regime under the AfCFTA. We are particularly excited by the confidence shown by pension fund managers and other institutional investors in this first issue and we appreciate the InfraCredit team, StanbicIBTC Capital and other parties to the transaction for this new structure. , which helps to reduce the risk of the transaction and aligns the interests of different stakeholders ”.

Also commenting, InfraCredit CEO Mr. Chinua Azubike said: “It has been exciting working with LFZC on this landmark transaction. It further demonstrates our commitment to inclusive access to long-term local currency finance for infrastructure development. Interestingly, LFZC set a new benchmark in the Nigerian domestic debt capital market, as Nigeria’s first 20-year corporate infrastructure bond, lengthening the corporate bond yield curve and strengthening the prospect for Nigerian companies to raise long-term financing in the local market. . The LFZC bond validates the appetite of national pension funds and other institutional investors for financing viable long-term infrastructure assets. We will continue to partner with all relevant stakeholders to implement new strategies aimed at unlocking domestic capital for infrastructure finance, in addition to creating quality asset classes to diversify investors’ investment portfolios. local institutions.

In a related vein, Stanbic IBTC Capital Limited Managing Director, Mr. Funsho Akere, said: “Stanbic IBTC Capital, FBNQuest Merchant Bank and Radix Capital Partners are delighted to have advised LFZC on this landmark issue highlights the depth and the liquidity of Nigerian debt capital markets and aligns with the growing demand from the pension fund industry for quality long-term assets. The success of the transaction demonstrates the confidence of investors in the vision and objective of the Lagos Free Zone and we thank the board of directors and management of LFZC for giving the issuing houses carte blanche to lead the process. process well. Supporting infrastructure development is a key pillar for Stanbic IBTC and we are very pleased to have acted as the lead issuing house for this historic infrastructure bond issue, which is the longest-running bond issue in the world. business maturing in the history of Nigerian capital markets.

Funso noted that LFZC is focused on providing critical infrastructure to alleviate the cost of doing business and facilitate the entry of global industrial brands into Nigeria, which is expected to boost sustainable development, galvanize economic growth and improve livelihoods. Nigerians, while deepening the Nigerian Debt Capital Markets through the issuance of innovative debt instruments.

The Lagos Free Zone is being developed as the largest integrated port economic zone in Nigeria and will serve as a beacon of industrial development across Nigeria and West Africa. Companies operating in the Lagos FTZ will benefit from various policy incentives underpinned by the legislative framework applicable to FTZs in Nigeria. In line with its vision statement – “to be the preferred industrial center in West Africa with world-class infrastructure”, the area is equipped with a host of shared industrial infrastructure needed to attract investment from the world’s major trading partners. Nigeria.

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