What is it about the Lagos State 13%-Fixed Rate Bond PO?






What is a Bond?

A bond is a long-term debt security issued by an institutional or governmental borrower, with contractual obligations regarding interest payments and redemption. It has a stated interest rate (known as Coupon) and will mature on a stated future date (usually 5 to 20 years in the Nigerian fixed income security market).

An Overview of Lagos State.

Lagos State was created on May 27, 1967 by virtue of State Decree No. 14 of 1967, which restructured Nigeria\'s Federation into 12 States. The State took off as an administrative entity in 1968 serving as the Federal Capital up to 1991 when the Federal Government relocated to Abuja and Lagos ceased to be Nigeria\'s political capital. Lagos nevertheless remains the nation\'s economic and commercial capital.

According to the recent census conducted by the National Population Commission, the State has a population of over 9 million, out of a national estimate of 150 million (comprising of 36 States). The United Nations estimates that at its present growth rate, Lagos State will be the third largest mega city in the world by 2015 after Tokyo and Mumbai. There are presently 20 Local Government Councils in the State. The State houses over 65% of Nigeria\'s total industries and over 250 financial institutions with headquarters of most Nigerian Banks and Insurance Companies.

What is it about the Lagos State 13%-Fixed Rate Bond Public Offer?

·         It pays an annual interest rate of 13% per annum split twice yearly (i.e. July 15 and January 15 each year).

·         At 13% coupon rate it ranked highest among all government issued bonds in the World Capital Market.  US treasury bonds pays an average of 4%, UK Government bond 5% at maximum (Source: Bloomberg LP)

·         It has a relatively short maturity period of 5 years after which you will collect your full initial investment.

·         It is a risk-free bond and qualifies as a Gilt-edged given it\'s A+ and AA ratings (by Agusto & Co and Fitch Ratings respectively) and the revenue generation capacity of the State.

·         It is going to be listed on the Nigerian Stock Exchange and the implication of this is that you can trade the bond at the OTC market of the NSE and twenty (20) other PDMMS.

·         You have options and you decide whether to hold your bond till maturity (and enjoy streams of coupon payments every six (6) months) or sell it off at the OTC market whenever there is an opportunity to make capital gains.

·         Both interest payment and capital gains are tax free at the instance of a \"special waiver\" granted by the Federal Inland Revenue Service (FIRS).

Who can buy the Lagos State 13%-Fixed Rate Bond?

Anybody above the age of 18 and who has the capacity to hold an investment in any security made available to the public. This Bond is specifically indicated for the following categories of people:

·         People who are skeptical about the equity market;

·         Retirees who just received their gratuity and want to invest their money in a security that pays regular dividends while guaranteeing safety of their initial sum invested;

·         High Networth Individuals who are looking to diversify their portfolio;

·         People who are hypertensive and don\'t like the stress that goes with regular investments;

·         People who are presently holding their money in fixed rate deposits and getting an interest rate of 13% and below; and

·         People who want to help Lagos State achieve its Mega City Project (\"New City on the Atlantic\") dream.

Why should I buy the bond through Cordros Capital Limited?

·         Your name and details will be included on our prestigious clients list (HNI\'s) and you will get a daily fixed income securities market report from us pertaining to the FGN and State Government Bonds transactions.

·         For clients willing to buy a minimum of 1000 units (i.e. N1million worth) we have arranged a one-on-one appointment schedule in our office and for clients willing to buy minimum of 5000 units we are prepared to meet with you wherever you are in Lagos state to have further discussions on this offer.


NOTE: Please, download the attached document to see the Offer Summary and the Application form. For further enquiries, please reply to layi.olaleru@cordros.comor simply call the following numbers:

             Layi+234-(0)703 895 4231, +234-1-2805063

            Wale+234-(0)803 303 0214

Click here for Offer Summary and Application Form

Attachment : Lagos State N50bn-13% Bond_Market Teaser & Application Form(a).pdf


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