Rating Release

Agusto & Co. hereby affirms the “Aa“ rating assigned to the Lagos State Government’s Series 2 Tranche II: ₦38.7 Billion and Tranche IV: ₦5.3 Billion Bonds

The rating expires on 30 September 2024.

Agusto & Co. hereby affirms the “Aa“ rating assigned to the Lagos State Government’s (“the Issuer”, “LASG”, “Lagos” or “the State”) ₦38.7 billion 10-Year 17.25% Bond Due 2027 (Series II Tranche II) and ₦5.34 billion 9 7 12 Year 15.85% Bond Due 2027 (Series II Tranche IV) under the ₦97.3 billion Series II Tranches I – IV Bonds. The assigned rating is supported by the uninterrupted monthly irrevocable standing payment order (ISPO) remittance of ₦1 billion from the State’s share of statutory allocation into a designated sinking fund account (SFA) to meet the outstanding Bond obligations, following the cessation of the previous earmarked internally generated revenue contributions in February 2021. Lagos State Government issued four bonds (Tranches I – IV) totalling ₦97.3 billion (from August 2017 to February 2018) to finance various infrastructure projects in the State. However, LASG exercised a call option in February 2021 and fully repaid the ₦46.3 billion 7-year 16.75% Bond Due 2024 (Tranche I) and₦6.91 billion 6 7/12 Year 15.60% Bond Due 2024 (Tranche III). Post the redemption of the Tranches I & III Bonds, the erstwhile monthly internally generated
revenue (IGR) deductions were discontinued as the ₦1 billion ISPO monthly deductions from the State’s share of statutory allocation is sufficient to fully cover the Tranches II & IV obligations until the maturity of the Bonds in August 2027.

The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.