By Eromoselele Abiodun, 07.01.2010
The Council of the Nigerian Stock Exchange (NSE), yesterday approved the N50 billion bond to be floated by the Bayelsa State government.President of the council of the NSE, Alhaji Aliko Dangote, who announced the approval to dealing members of the Exchange, called on them to support the state so that the government can realise its developmental objectives.
Governor of Bayelsa State, Dr. Timipre Sylva, in a chat with newsmen expressed confidence that the bond issue will be fully subscribed since it was fully underwritten by banks before it got the ExchangeÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s approval.The state is offering a total of 50,000,000 bond units at N1,00 per unit. The bond issue, which has a tenure of seven years is offered at a coupon rate of 13.75 per cent.
The governor said: ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œThis bond is a good investment outlet to portfolio managers particularly Pension Fund Managers (PFA). We are very sure that the bond will be fully taken. This is because a lot is happening in Bayelsa State. Our location gives us a lot of advantages and international investors are showing interest in the offer. We are making efforts to develop our state and this bond will give a lot of fire to our efforts.ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â The bond, he added, will help the state reduce its exposure to banks,renegotiate its loan repayment pattern, interest rate, and build a gas turbine that is expected to give the state 24-hour power supply.
Reacting to insinuations in some quarters that the money raised from the bond issue may be channeled to other purposes, the governor said that those expressing those fears are ignorant of the fact that utilisation of proceeds from a bond issue is predetermined.ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œAny one expressing fears that the funds raised from this effort will not be for the purpose for which it was raised is ignorant of the laws guiding bond issuance. If I leave office today the man coming after me will start from where I stopped. It is not as if we are borrowing fresh funds, what we are doing will help us refinance our loans and reschedule it.
ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œWithout this bond our debt profile exists and it is taking a large chunk of our revenue. People should not seat in Lagos and just criticise us, they should come to our state and see what we are doing. The ongoing effort will help us consolidate and make out state tourist and investorsÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢ heaven.This bond will help us build a road to brass, and the brass LNG worth about $17 billion,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â he said.