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Ondo Green-lighted to Seek N 27 Billion from Capital Markets

By on January 2, 2012

The Ondo state government has been greenlighted by the regulatory bodies to approach the capital market with phase 1 of its bond issuance program which seeks to raise n 27 Billion as a first tranche.

The state received the approval after complying with the regulations laid down in section 224 of the Investment and Securities Act 2007 and Rule 307 of the Securities and Exchange Commission’s Rules and Regulations.

These regulations require the state to enact a law authorizing the issuance of bonds, and creation of a sinking that is to be fund fully funded from the consolidated revenue fund account of the issuer.

Radix Capital Partners Limited is the lead issuer, and has partnered with FBN Capital Limited, FCMB Capital Markets Limited, Fidelity Bank PLC, Long-term Global Capital Limited, Skye Financial Services Limited, Stanbic IBTC Bank Plc, Standard Chartered Bank and Union Capital Markets Limited on the issuance program.

The bond has been rated A and A- by Augusto & co and Global Credit Rating (GCR) respectively.

Ondo state has also obtained an Irrevocable Standing Payment Order (ISPO) from the Federal Ministry of Finance that ensures coupon and principal payments are deducted from source, making this a virtually risk-free investment.

The proceeds from the bond will be utilize to fund infrastructure projects such as hospitals, schools and roads.