Lagos Free Zone Company (LFZC), the first private free zone in Nigeria with a fully integrated deep sea port has announced the successful issuance of a N17.5 billion 20-Year Series 3 Senior Guaranteed Fixed Rate Corporate Infrastructure Bonds due 2043.
The bond issuance is the third tranche under its ongoing upsized N61 billion Bond Issuance Programme
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 fintech.
Lagos Free Zone is being developed as the largest port based economic zone in Nigeria and shall serve as the beacon of industrial development across Nigeria and West Africa.
Enterprises operating in Lagos Free Zone will benefit from various policy incentives underpinned by the legislative framework applicable for free zones in Nigeria.
In line with its vision statement, the Zone is equipped with a host of shared industrial infrastructure necessary for attracting investments from the leading trade partners of Nigeria.
Backed by an irrevocable and unconditional guarantee from InfraCredit, LFZC Series 3 Bond is accorded a “AAA” long term credit rating by Agusto and Co. and GCR, reflecting the highest degree of creditworthiness for the Series 3 Bond.
The offer was oversubscribed with participation from institutional investors including ten domestic pension funds and an insurance company.
The transaction is the third 20-year non-FGN Bond issue in the Nigerian debt capital markets and reinforces the appetite of domestic institutional investors for long tenured non-FGN instrument. The Series 3 Bond provides a unique opportunity for pension fund managers and other institutional investors to match their long-term liabilities with low-risk, high yield assets.
Speaking on the transaction, the Chief Finance Officer (CFO) of LFZC, Mr. Ashish Khemka stated: “This is our third successful bond issuance at LFZC and it is a testament to the capacity of the Nigerian debt market as a veritable source of domestic capital for infrastructural development in Nigeria.
“The impressive participation and pricing of this bond issuance by the domestic institutional investors further strengthens our commitment to realize our vision and thereby enhance Nigeria’s competitive positioning with our continuous focus on Ease of Doing Business parameters. LFZ further underscores Nigeria as a compelling industrial hub within the West African coast and ideally orients itself in anticipation of the imminent single market regime under AfCFTA. We are particularly excited by the improved confidence demonstrated by pension fund managers and other institutional investors at this milestone issue and we appreciate the team at InfraCredit, Stanbic IBTC Capital and other parties to the transaction for this novel structure, which helps to de-risk the transaction and aligns the interest of different stakeholders.
According to the CEO of InfraCredit, Chinua Azubike, “This is yet another landmark transaction, and we are pleased to have supported the successful issuance of this Series 3 Bond following the Series 2 issuance in 2022.
“Special economic zones are critical to accelerating Nigeria’s industrialization, attracting local and foreign direct investment, job creation, and inclusive growth.
“Thus, the success of this 20-year Series 3 Bond reinforces the domestic market opportunity for long-term local currency financing for infrastructure projects, and the unprecedented subscription level by the domestic institutional investors signals a strong demonstration effect to governments as the country seeks private sector participation in bridging the huge infrastructure gap in the country.”
According to him, it is also evident that local pension fund investors will continue to play an important role in supporting private sector led infrastructure development in Nigeria.
Also commenting on the transaction, Funso Akere, Chief Executive of Stanbic IBTC Capital Limited, said: “Stanbic IBTC Capital, CardinalStone Partners, FCMB Capital Markets, FSDH Capital and Radix Capital Partners are delighted to have advised LFZC on its third 20-year Infrastructure Bond issuance.
“The N17.5bn Series 3 Bond issuance was oversubscribed and attracted wide participation from domestic pension funds who have a growing demand for quality long-dated assets.
“This should encourage other corporates to tap the domestic capital markets to raise local currency funding for viable infrastructure projects. Supporting infrastructure development in Nigeria is a key focus area for Stanbic IBTC and we thank the Board and Management of LFZC for trusting Stanbic IBTC Capital and the other Joint Issuing Houses to guide the process to a successful completion.”
