Lagos State Bond records 18% over Subscription

The Lagos State N50 Billion bond issue has recorded an oversubscription of 18 percent leading to the raising of a total amount of N58.9 billion.
Mr. Rotimi Oyekan, Commissioner for Finance and Mr. Opeyemi Bamidele, his Information and Strategy counterpart, made this disclosure at a joint press briefing held in Ikeja. 
He said though the challenge was to raise N50Billion, but successfully raised 58.9Billion. “This is the first issue in the last 18 to 24 months in the annals of the recent history of the Nigerian financial markets that would record an oversubscription,” he said.
Mr. Oyekan added that by oversubscribing to it, the Nigerian public and Lagosians in general have displayed their confidence in the issue and in the Governor Babatunde Fashola –led administration.
He added that the state has already reached out to the Security and Exchange Commission to allow the State make use of all of the oversubscribed  funds of the issue, which is subject to the approval of SEC, adding that the State is still awaiting SEC’s  directive on the move.
He explained that if SEC however directs the return of the oversubscribed funds, it would be returned to the investors who made the money available as soon as possible.
The Finance Commissioner emphasized that the success of the State in the Bond issue is a clear demonstration that investors will always embrace issues that have clearly spelt out purposes, institutions that have directions and are direct and conservative.
Mr. Oyekan revealed that the state shall be coming to the market again this year to sustain the volume of work that the government is doing in Lagos through this kind of financing subject to regulatory approvals. “We intend to come back to the market to launch something in furtherance of what we have started.”
This result he said is a vote of confidence by the Nigerian investing public in the capital market. “It shows that the capital market can still stand as an avenue where people can access funds for their needs provided they meet minimum criteria as spelt out by the regulatory authorities,” he said. 
He reiterated that it is also necessary to communicate the over subscription to ensure that more people continue to invest in capital markets where people who have money are needed, adding that it is clear that governments at all levels and private institutions require the access to do the jobs of development of all the people and financing that is very important for their welfare.
Also speaking, Mr Ben Akabueze, Commissioner for Economic Planning and Budget, expressed the hope that other issuers, governments and other agencies will summon the kind of courage which the Lagos State Government has brought to bear in ensuring the rebuilding of confidence in the market.
He stated that the capital market is one which thrives substantially on confidence but which has been greatly   shaken in the last several months with the risk of the people throwing away the baby with the bath water.
Mr. Akabueze added that the Capital market remains a veritable option for those who intend to raise funds and those with surplus funds to invest just as the state has done pointing out that what is required is greater care in choosing the instrument to invest in.
The Finance Commissioner also listed some of the projects to benefits from the Bond to include the Yaba to Iddo road, the construction of a bridge to link Okota to Surulere and the recently completed Bourdillon Road and many other on-going.
“What we will be doing is to use the process of the Bond to complete all these projects or refinance the obligations that we entered into when we started the projects such that we will have repayment obligations that are long term in nature. It would enable us manage those obligations better than we are using short term funding”.
He also called on the Federal Government to as a matter of necessity create the enabling environment that would enable people have the confidence to invest in equity markets and a market that allows investors to diversify their holdings .