The Rivers, Osun, Gombe and Lagos state governments have filed applications with the Listings Regulation Department of the Nigerian Stock Exchange to raise N507bn in bonds from the capital market.

Investigations by our correspondent revealed that since 2010, most state governments had been approaching the capital market to raise bonds to further boost developments in their states as a result of inadequate allocations they were receiving from the federal purse and paltry internally generated revenue.

Information posted on the NSE website on Wednesday stated that the applications were at various stages of approval.

According to the information, the Rivers State Government is seeking to raise N250bn and has filed an application to offer for subscription N100bn Series 1 Bond due in 2017 at N1,000 under the N250bn debt issuance programme.

The NSE noted that the issuing house to the Bond was Chapel Hill Advisory Partners Limited, while the stockbroker was FCSL Asset Management Limited.

The Osun State Government is also planning to offer for subscription N60bn in bonds. According to the NSE, the book building for the programme is in process.

Also, the Lagos State Government, in its ongoing debt issuance programme, is seeking to raise N167bn and has filed an application to the NSE to raise N80bn Series 1 Bond due in 2019 at N1,000.

Last year, Lagos State received approval to raise N57.5bn at 10 per cent fixed rate under the N275bn debt issuance programme for 2010/2017 (Series 2).

The state is leading the pack in terms of volume and value and raised N50bn in 2008 and N57.5bn in 2010, totalling N107.5bn raised in its first and second bonds issues in 2008 and 2010, respectively.

On its part, the Gombe State Government has received an approval in principle for its application to raise N20bn Series 1 Bond due in 2018 at N1,000 under its N30bn debt issuance programme.

The issuing house to the bond is Access Bank Plc. Reuters reported on Tuesday that the first tranche of N20bn, which had a 15.5 per cent yield, would help fund infrastructure projects and pay off existing short-term loans.

It noted that the state planned to use nine per cent of the net proceeds to refinance existing loans, with the rest going to construct roads and schools.

Source: Punch (written by Udeme Ekwere)