Rating Release 

Agusto & Co. hereby affirms the “Aa” rating assigned to Lagos State Infrastructure Sukuk SPV Plc’s  ₦19.815 Billion Seven-Year 14.675% Fixed Return Forward-Ijarah Lease Sukuk Due 2030, with a stable outlook. 

The rating expires on 30 September 2027. 

Agusto & Co. hereby affirms the “Aa” rating assigned to the Lagos State Infrastructure Sukuk SPV Plc’s (“LASGIS SPV Plc”, “the Issuer”, “SPV” or “the Company”) ₦19.815 Billion Seven-Year 14.675% Fixed Return Forward-Ijarah Lease Sukuk Due 2030 (“Series II”, “Sukuk”, “the Issue” or Notes”) under the Lagos State Government’s (“LASG”, “Lagos State”, “the State” or “Originator”) ₦1 Trillion Debt and Hybrid Instruments Issuance Programme. The affirmation reflects the adequate coverage of the Series II Sukuk obligations by the Sinking Fund Account (SFA), which is funded through the continuous fulfilment of the ₦200 million monthly Irrevocable Standing Payment Order (ISPO) deductions from the State’s statutory allocation, alongside ₦293 million monthly remittances from the State’s Consolidated Debt Service Account (CDSA). The rating also considers Lagos State’s increasing FAAC receipts and the relatively low proportion of first-line deductions to its FAAC inflows, which provide adequate fiscal capacity to sustain the required remittances over the remaining tenor of the Sukuk. Notwithstanding the potential political and policy transition risks associated with a change in administration following the 2027 elections, we expect Lagos State’s low first-line deductions relative to FAAC inflows, together with its well-established institutional structures, to support continuity in debt servicing over the remaining tenor of the Sukuk.

In 2022, Lagos State sponsored the incorporation of Lagos State Infrastructure Sukuk SPV Plc, a special purpose vehicle established to facilitate the issuance of Islamic compliant financing for infrastructure projects. In May 2023, the SPV issued the ₦19.815 billion Series II Seven Year 14.675% Fixed Return Forward Ijarah Lease Sukuk due 2030. The net proceeds were utilised to finance the rehabilitation and upgrade of the 3.42-kilometre Awoyaya section of the Eti Osa Lekki Epe Expressway in Lagos State (Sukuk Asset). The Series II Sukuk carries a fixed rental rate of 14.675%, with rental payments made semi-annually on 21 May and 21 November throughout its seven-year tenor. Following the expiration of the 30-month moratorium on 23 November 2025, the outstanding Sukuk amount is being redeemed through semi-annual instalments, with full redemption scheduled at maturity in 2030.