Radix Capital Bullish on Ondo’s N27bn bond
Governor Olusegun Mimiko
Raddix Capital Partners Limited, which is the leading issuing house for the Ondo State N27 billion Bond, has said that given the caliber and pedigree of the issuing houses and investors’ confidence in the ability of the state to repay, the bond would be oversubscribed.
The Securities & Exchange Commission and the Nigerian Stock Exchange recently approved the application of the Ondo State Government to raise fresh funds through its N50bn Debt Issuance Programme under which the state intends to issue a first tranche of N27 billion.
Raddix said in statement last Monday that all the other issuing houses have the experience and pedigree to make state realise its goal of a successful bond raising exercise.
According to the capital market operators, other firms involve the exercise are: FBN Capital Limited; FCMB Capital Markets Limited; Fidelity Bank Plc; Longterm Global Capital Limited; Skye Financial Services Limited; Stanbic IBTC Bank Plc; Standard Chartered Bank and Union Capital Markets Limited.
The bond has a rating of A and A- by Agusto and Global Credit Rating (GCR) respectively, meaning is a “general obligation bond.”
This means that repayment will be made from current and future resources of the State. The State has obtained an Irrevocable Standing Payment Order (ISPO) from the Ministry of Finance authorising deduction of interest and principal from its share of the Federal Allocation at source. The ISPO immunises the Ondo State bond from the default risk associated with other debt issuance programme.
The statement added that the Ondo State Government under the leadership of the Dr. Olusegun Mimiko, had embarked upon an aggressive redevelopment of the state.
The proceeds of the bond, it said, would be used to pursue the aggressive infrastructural rejuvenation which will serve as a spring board for the state’s industrial development.
“These include the construction of well maintained roads and water ways; the provision of portable water and strengthening of electricity infrastructure and construction of ultra modern Mother and Child Hospitals dedicated to treating pregnant women and children; an initiative that has won the State laurels from the international community, will be further entrenched,” the statement said.
Also, through the bond, Ondo’s agriculture is expected to be lifted from its largely subsistent status into commercial basis providing employment and source of wealth and well being for farm households.
By Goddy Egene