Osun Bond Raises N45.1 Billion @ NSE

The Nigerian Capital Market during the week recorded an unprecedented feat as the N22 billion State of Osun offer was over-subscribed by more than 100 per cent.

Governor Rauf Aregbesola, said in Osogbo, the state capital, at the completion ceremony between the state government and the Joint Issuing Houses for a N30 billion – 14.75% fixed rate development bond (Tranche 1) due in 2019.

According to the State Government, the state went to the Capital Market to raise N22 billion but eventually realized N45.1 billion, which translates to over N100% over-subscription.

Dr. Wale Bolorunduro, commissioner for Finance, said the N22 billion bonds also received 78 entries, which represents another unparalleled record in the annals of Capital market transactions.

Similarly, the state’s bond issue also changed completely the face of Capital market with over 60% of the subscription cornered by the Pension Fund Administrators.

This scenario represents a departure from the past in which offerings were dominated and snapped by the banks that normally played crucial roles in bond issuance.

Government said that this development validates the level of confidence long-term fund investors placed on the state.

Aregbesola, state noted that the confidence did not just come but for the prudent management and financial engineering of the administration.

In his response, the Governor described the transaction as a landmark bond, which has recorded a lot of firsts in Nigeria.

Aregbesola said that for the first time, the state was rated with Bond rating of A and A-. Besides, since the creation of the state in 1991, it had no account but within 24 months of his administration, a standard accounting record was put in place, which Augusto Rating Agency few months ago rated A-.

All these successes, Aregbesola attributed to accountability, transparency and prudent financial system developed by his government, saying this would have been a mission impossible some years back.

He revealed that his administration met an insolvent state, which could not even meet its statutory obligations, saying his government had to source for a billion Naira to meet this obligations.

“When we were to begin this, it was as if we were going on an impossible journey. And this is for a good reason; we met an insolvent state, a state that must pay more than N1billion to meet its statutory obligations.

“The sheer impossibility of this was what informed the misread or the hallucination of the opposition in citing all sorts of figures. First, they said we are taking N200 billion. Later they said N150 billion. The last figure they quoted was N7.5 billion.

“The sheer impossibility of our efforts informed the hallucination. They just want to attack without having the correct information. I am happy that we are confounding them and we shall continue to confound them.

“This State, since its inception, has no account. And a government that is just 24 months old could develop an account that Agusto and Co. and the other rating agencies could rate A and A-, this is amazing. We must congratulate ourselves for such sudden flight that attracted the highest corporate and financial affection as we now get at the Capital Market.

“I want to tell our traducers, who would always want to see evil in us and what they could profit from it, better think twice that this collection of the best in Nigerian financial industry cannot be here for the fun of it,” Aregbesola said.

He noted that it is an uphill task taking a state from zero or sub-zero level to an enviable height where the Capital market and Nigerian Security and Exchange Commission could vouch for it.

The governor commended the State House of Assembly for its rare support in making sure that the bond issue ended in a resounding success, noting that the House is a very difficult stage to transit in or states involved in this kind of transaction.

He equally thanked the people of the state for the belief and confidence and for the mandate and unflinching supports they have been giving to his government.

Speaking on behalf of the joint issuing houses, Mr. Taiwo Okeowo said that it was in recognition of the successes recorded by Aregbesola’s administration that the offer was over-subscribed by more than 100%.

Describing the transaction as breakthrough, Okeowo said with what is happening now, the governor is taking the state to an unimaginable height with the bond of development.

He expressed sincere pleasure of the joint issuing houses in working with the Government of the State of Osun and a sign of better things to come.