CLOSING TOMORROW: LAGOS STATE GOVERNMENT SERIES II FORWARD-IJARAH SUKUK ISSUANCE OF UP TO NGN20 BILLION

Dear Valued Investor,

MBC SECURITIES LIMITED is pleased to inform you that the Lagos State Government’s (“Lagos State’s”, ‘’LASG’s’’ or “the State’s”) Series II up to ₦20 Billion Forward-Ijarah Sukuk Issuance (‘Series II Issuance” or “Series II Sukuk”), under LASG’s ₦1 Trillion Debt and Hybrid Instruments Issuance Programme (“DAHI Programme”) is NOW OPEN. The Offer is scheduled to close on Thursday, May 18, 2023.

Lagos State is Nigeria’s economic focal point with a GDP of ₦26.6 trillion (CAGR of ~11% from 2017 to 2021), representing c. 15% of Nigeria’s GDP.  Lagos State is among the 10 fastest-growing markets in Africa (and was ranked the 4th largest city in Africa in 2021) accounting for the location of more than 65% of Nigeria’s industrial capacity. The headquarters for most Nigerian Banks are in Lagos as well as top-tier companies and trans-national corporations. The State is strategically positioned as a major trade port – with 50% of Nigeria’s port revenue beings generated in Lagos from 3 lighter terminals and 2 seaports – and first choice destination for foreign investors.

The issuance of the Sukuk – the second by a Nigerian sub-national that is registered with the SEC – will attract another orbit of investors to the ongoing infrastructure development in Lagos State. The Sukuk is rated ‘Aa’ and ‘Aa-‘ by  Agusto & Co. and GCR respectively, which is underpinned by the State’s resilient financial condition, robust financial flexibility, suitable expenditure profile and very strong cash-generating capacity to meet local currency obligations in a timely manner from Internally Generated Revenues (IGR). Lagos State’s IGR is over 70% of the State’s total revenues. In 2021, the State generated total revenue of ₦771bn, including IGR of ₦573bn. The Sukuk is further enhanced by an Irrevocable Standing Payment Order (ISPO) on Lagos States’s share of statutory allocation.

Lagos State is a leader in the progression and implementation of the National Sustainable Development Goals (“SDGs”). Over the last 10 years, Lagos State’s spending on infrastructure development within the State has exceeded circa N3 trillion. The focus on infrastructure development is essential, fostering economic growth and boosting the State’s financial capacity, enabling it to attract further capital. 

The issue proceeds from the Sukuk Issuance will be applied to financing the construction/rehabilitation of the Awoyaya section of Eti-Osa/Lekki/Epe Expressway

The indicative terms of the proposed Series II issuance are as stated below:

In the interim, kindly access supporting offer documents via [Lagos State Series II Sukuk Offer Documents] for your review and consideration.

1.    Lagos State Series II Sukuk Pricing Supplement

2.    Lagos State Series II Sukuk Declaration of Trust

3.    Series II Sukuk Issue Rating Report by Agusto & Co (“Agusto”) and Global Credit Rating Co. (GCR)

4.    The Originator’s Rating Report by Agusto & GCR

6.    ISPO Approval

7.    Audited Financial Statements (2017-2021)

8.    LASG DAHI Programme Prospectus

9.    LASG Programme Trust Deed

10. Commitment Form

11. HNI Declaration Form

For further enquiries, kindly reach:

Ismail Lawal           –   ilawal@mbcgroup.com.ng /08079214500

Obianuju Egwuatu –   oegwuatu @mbcgroup.com.ng/ 08137475868  

Oge Igboanu          –   oigboanu@mbcgroup.com.ng /08084725580

Titus Oyafemi        –   toyafemi@mbcgroup.com.ng/ 08023906411

 Thank you.