FMDQ Exchange lists LFZC Funding ₦25bn 20-year infrastructure bond

From left: Managing Director, FMDQ Securities Exchange, Ms. Tumi Sekoni; CEO, LFZC, Dinesh Rathi; CEO, FMDQ Group, Bola Onadele Koko; and CEO, Stanbic IBTC Capital, Funso Akere, during the listing ceremony, in Lagos, recently

FMDQ Securities Exchange Limited has announced the listing of the LFZC Funding SPV PLC ₦25billion Series 2 Fixed Rate Bond under its ₦50billion Bond Issuance Programme.

This issuance, the Exchange said, has broken a record as the corporate bond issued with the longest tenor – 20 years in the Nigerian debt markets.

LFZC is a special purpose vehicle (SPV) set up by the 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 (830) hectares, is the first private sector-led initiative in Nigeria.

To commemorate this notable event, FMDQ Exchange hosted the Issuer, LFZC represented by the Chief Executive Officer, Dinesh Rathi, and other representatives of the Company.

Also present 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.

Managing Director, FMDQ Exchange, Ms. Tumi Sekoni, 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.

She described the transaction as yet another highly exemplary and indeed, positive step towards addressing some of the infrastructural challenges in Nigeria.

She noted that FMDQ, 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.

Rathi in a special address, said: “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. 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.”

The success of special economic zones in Nigeria is critical to accelerating industrialisation, attracting local and foreign direct investment, job creation, and inclusive growth.

Fund managers

Speaking on behalf of the other sponsors to the listing, the Chief Executive, Stanbic IBTC Capital, Funso Akere, expressed the Issuing Houses delight with the LFZC SPV’s ₦25billion 13.25% 20-year Infrastructure bond, the second under its ₦50billion 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.”

Similarly, Chinua Azubike, Chief Executive Officer, InfraCredit, guarantor to the bond, said: “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 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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