Rating Release

Agusto & Co. hereby assigns an indicative “Aa” rating to the Lagos State Government’s (“Lagos State”, “Lagos”, “LASG”, “the Issuer” or “the State”) proposed ₦14.8 Billion Series III: 5-Year Fixed Rate Green Bond Due 2030 (“Series III”, “the Issue” or “the Green Bond”) under its ₦1 Trillion Debt and Hybrid Instruments Issuance Programme (“DAHI” or “the Programme”)

The rating expires on 30 September 2026. 

Agusto & Co. hereby assigns an indicative “Aa” rating to the Lagos State Government’s (“Lagos State”, “Lagos”, “LASG”, “the Issuer” or “the State”) proposed ₦14.8 Billion Series III: 5-Year Fixed Rate Green Bond Due 2030 (“Series III”, “the Issue” or “the Green Bond”) under its ₦1 Trillion Debt and Hybrid Instruments Issuance Programme (“DAHI” or “the Programme”). The assigned rating reflects our assessment of Lagos State’s strong capacity to service the Series III Bond obligations (coupon and principal) jointly from the Consolidated Debt Service Account (CDSA) to be funded monthly from internally generated revenue (IGR) remittances and the issuance of an Irrevocable Standing Payment Order (ISPO) to be approved by the Federal Ministry of Finance. The rating is further reinforced by LASG’s strong fiscal health, driven by steady cash flows (with IGR making up an average of 71% of total receipts over the past three years) and supplemented by statutory allocations. The assigned rating is also supported by the State’s track record of meeting local-currency obligations and maintaining disciplined spending. We also take cognisance of the Green Bond Certification obtained under the Climate Bonds Standard Certification Scheme in April 2025, affirming the Issue’s conformity with the International Capital Market Association’s (ICMA) Green Bond Principles (GBP) and alignment with the objectives of the Paris Agreement on climate change. Nevertheless, the rating is constrained by the State’s growing debt burden, especially its unhedged foreigncurrency exposures, which has increased vulnerability to exchange-rate volatility. These risks are, however, tempered by LASG’s modest debt-service-to-revenue ratio, owing to the concessional terms and extended maturities of a substantial portion of its debt portfolio.