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SEC moves to deepen, strengthen bond market regulation

By on October 28, 2014

The Securities and Exchange Commission (SEC) is making fresh efforts to deepen and strengthen the monitoring of the Nigerian bond market.
Following the collapse of the equities market in 2008, the bond market has remained the toast of fund raisers, including governments and corporate bodies.

Apart from several trillion of naira already raised by the federal government and its agencies, about 15 state governments have also N514.4 billion through the issuance of bonds between 2008 and 2013.
However, THISDAY gathered that SEC, which is the apex regulator for the capital market, is making frantic efforts to make the  become more  attractive to both local and international issuers and investors.
To this end, SEC is  said to be putting together a special book that will highlight the history  of  the bond market, its performance over the years, potential and efforts to ensure safety of investments in that  sector of the capital market.
“I can tell you that as part of its regulatory efforts to deepen the capital and attract more investments, SEC is putting together what I will call an enlightenment tool, a book that will enlighten investors, both foreign and domestic as well as potential issuers about our fixed income market. The history of the market, safety, performance over the years, projects financed with funds raised from the market among others will be contained. It will be an authoritative source of key information about our market,” a source said.
It was reliably learnt that most of the projects financed through the market by over 20 states would be featured in the book and other key information.

Data compiled by the SEC had shown that  states that  raised bonds in last five years include Lagos, with a total of N187 billion from three issues; Imo, N18.5 billion, Kwara, N17 billion,  Niger, N15 billion Bayelsa, N50 billion, Kaduna, N8.5 billion,  Ebonyi, N16.5billion, and Edo, N25 billion.
Others are Benue, N13 billion, Delta, N50 billion; Ekiti, N25 billion; Ondo, N27 billion; Gombe, N20 billion; and Osun, N30 billion.
Two states currently have their applications with SEC to raise funds from the market. They are Bauchi and Ebonyi States, which are preparing to raise N24.34 billion from the market.
Bauchi is to raise N15 billion, while Ebonyi will raise N9.340 billion.
Bauchi plans to use the funds for the completion of its international airport, completion of a specialist hospital and the refinancing of bank loans.

Similarly, Ebonyi plans to use the net proceeds of the N9.340 billion for the refinancing of existing loan, part financing of International Market, Abakaliki, electrification and accessories for the Ochudo Secretariat.
In specific terms, Bauchi State will use N5.848 billion for the completion of the international airport; N2.030 billion for the completion of the specialist hospital;  and N6.338 billion  for the refinancing of bank loans.  About N1.148 billion is the cost of the issue.
For Ebonyi, N4.340 billion is expected to be used to refinance existing loan with United Bank for Africa, which was taken to part finance Ochudo City and International Market in Abakaliki. About N2.453 billion will be used to part finance the market, while N1.8 billion will be used for the electrification and accessories for the Ochudo secretariat. A total of N743.2 million is set aside to cover the estimated cost of the issue.

 

[This Day]