Ogun govt seeks N30 billion loan for funding of Agro-Cargo airport construction
The government of Ogun State is seeking to raise about N30 billion in new debt capital to fund the state’s agric-based cargo airport.
Documents obtained at the weekend showed that the government has opened application list for private investors to subscribe to a N30 billion five-year bond under a special purpose vehicle known as BOFT Infrastructure SPV Limited.
The bond issue, being marketed exclusively to high networth individual and institutional investors, is being undertaken through a book building method- a selective issuance process under which preliminary bids by qualified investors are aggregated to determine the final coupon and other issuance details.
The N30 billion bond has a tenor of five years with prospective coupon range of between 16.00 per cent and 16.50 per cent. Minimum subscription is N10 million while the application list is scheduled to close this weekend.
The bond is backed up by an irrevocable payment standing order (ISPO) on Ogun State’s statutory allocation account with the federal government, meaning that funding for the bond repayment and coupon shall automatically be deducted from the state’s federal allocation.
According to the prospectus, the net proceeds of the bond will be used to fund the Gateway Agro-Cargo International Airport as well as other unspecified identified projects in the state.
The government had incorporated BOFT Infrastructure SPV Limited as a special purpose vehicle to raise capital through private company bond issuance for the completion of the airport project.
