FMDQ Bond Issuance Programme. This is another historic feat by the Nigeria’s largest securities exchange by turnover. This issuance, by LFZC Funding SPV Plc has broken a record as the corporate bond issued with the longest tenor – 20 years – in the Nigerian debt markets.
LFZC SPV is a special-purpose vehicle set up by Lagos Free
Zone Company to raise finance through the listing of debt securities, which
would be used to boost its business expansion exercise and to restructure the
company’s debts over a specified period. The Lagos Free Zone, covering an area
of eight hundred and thirty (830) hectares, is the first private sector-led
initiative in Nigeria.
To commemorate this notable event, FMDQ Exchange hosted the
Issuer, Lagos Free Zone Company, represented by the Chief Executive Officer,
Dinesh Rathi and other representatives of Lagos Free Zone Company. Also present
at the Ceremony were the sponsors of the issue and Registration Member
(Listings) of FMDQ Exchange – Stanbic IBTC Capital Limited, FCMB Capital
Markets Limited and FSDH Capital Limited, as well as other parties to the
issue.
Tumi Sekoni, Managing Director, FMDQ Exchange, whilst
welcoming the guests, congratulated the Issuer and went on to express FMDQ
Exchange’s pleasure at the listing of the LFZC SPV bond on its platform,
stating that this is yet another highly exemplary and indeed, positive step
towards addressing some of the infrastructural challenges in the nation.
She further stated that FMDQ Exchange, being an Exchange
with a passion for infrastructure and sustainable development in Nigeria, has
again demonstrated its unflinching commitment in this regard by providing due
diligence and availing its credible and efficient platform for the listing and
trading of debt securities.
Dinesh Rathi, whilst delivering the special address, stated
“this is a milestone transaction for us at Lagos Free Zone Company and it is a
testament to the capacity of the Nigerian debt markets as a veritable source of
domestic capital for infrastructural development in Nigeria. The response to
this bond programme further strengthens our commitment to realise our vision
and thereby enhance Nigeria’s competitive positioning with our continuous focus
on Ease of Doing Business parameters and world class infrastructure, embedded
with all modern facilities.
“We are particularly excited by the confidence demonstrated
by Pension Fund Managers and other institutional investors at this milestone
issuance, and we appreciate the team at Infrastructure Credit Guarantee Company
Limited (“InfraCredit”), Stanbic IBTC Capital Limited and other parties to the
transaction for this novel structure, which helps to de-risk the transaction
and aligns the interest of different stakeholders.”
Delivering the sponsor’s remarks, Stanbic IBTC Capital
Limited, on behalf of the other sponsors to the listing, through its Chief
Executive, Funso Akere, mentioned that “Stanbic IBTC Capital, FCMB Capital
Markets Limited, FSDH Capital Limited and Radix Capital Partners are delighted
to have acted as Issuing Houses to LFZC SPV’s N25billion 13.25percent 20-year
Infrastructure bond issuance, which is the second issuance under its N50
billion bond issuance programme.
The Series 2 Bond Issuance was 139 subscribed and attracted
wide participation from pension funds who have a growing demand for quality
long-dated debt instruments. The success of the transaction demonstrates
investors’ confidence in Lagos Free Zone Company and the free zone’s impact on
socio-economic and industrial development in Nigeria. We expect this should encourage
other corporates to tap the domestic capital markets to raise local currency
funding for viable infrastructure projects.”
According to Chinua Azubike, Chief Executive Officer,
InfraCredit, guarantor to the bond “this is yet another milestone transaction,
and we are pleased to have supported the successful issuance of this Series 2
Bond following the maiden issuance in 2021.
The success of special economic zones in Nigeria is critical
to accelerating industrialisation, attracting local and foreign direct
investment, job creation, and inclusive growth, however one key barrier we have
unlocked with our guarantee, is enabling companies like Lagos Free Zone Company
access up to twenty (20) year local currency finance from domestic pension
funds at scale to match the long-term lifecycle of infrastructure investment
needed to develop these zones, it is evident that local pension fund investors
are playing an important role in supporting private sector led infrastructure
development in Nigeria.
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