The Lagos State Government has opened its Series 5 Fixed Rate Bond, targeting up to N200 billion within its N1 trillion Debt and Hybrid Instruments Issuance Programme. The offer opened on Friday, October 9, 2026, and closes on Friday, October 16, 2026, with pricing to be determined through book building.
The 10-year bond, due in 2036, carries indicative coupon guidance of 16.50%–16.75% per annum. Proceeds are earmarked for priority infrastructure, including the Blue Line rail extension, hospital construction, and the Omu Creek Road and bridge project.
Under the offer terms, the minimum subscription is N5 million, representing 5,000 units at N1,000 each, with additional subscriptions in multiples of N1,000. Coupon payments are fixed and payable semi-annually. Principal repayment begins after a 36-month moratorium and is spread semi-annually over the remaining seven years. The instrument will be listed on the Nigerian Exchange Limited and/or FMDQ Securities Exchange Limited. Issuer ratings cited in the offer are Aa- from Agusto & Co. and AA from GCR, with an indicative issue rating of Aa and a stable outlook from Agusto & Co.
Allocation figures show N122.16 billion, or 61.1% of gross proceeds, directed to the Blue Line rail development. Another N48.87 billion goes to health projects, including the New Massey Street Children's Hospital and the 280-bed Ojo General Hospital. The Omu Creek project receives about N24.43 billion for a 3.915-kilometre road incorporating a 600-metre bridge, while estimated issue costs account for N4.54 billion.
At the N5 million minimum investment, the indicative coupon range would produce annual gross interest of N825,000 to N837,500 while the full principal remains outstanding. Using the midpoint of 16.625%, that equals N831,250 per year, split into two semi-annual payments of N415,625 before applicable taxes.
Lagos State's internally generated revenue reached N1.85 trillion in 2025, up 19.7% from N1.55 trillion in 2024, and accounted for 69.4% of revenue excluding grants. Total operating revenue, including grants, rose 15.5% to N2.68 trillion in 2025. Net cash from operating activities increased 7% to N1.39 trillion, while year-end cash and cash equivalents climbed 27.1% to N540.60 billion.
Repayment support combines contributions from the State's Consolidated Debt Service Account with deductions from federal allocations through an Irrevocable Standing Payment Order, subject to final approval. These funds flow into a sinking fund administered by joint trustees, with projected monthly funding of N3.40 billion for the first three years and N4.57 billion thereafter.
