Infrastructure Funding: FMDQ Exchange Admits LFZC Funding SPV ₦25bn

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In another historic feat, Nigeria’s largest securities exchange by turnover, FMDQ Securities Exchange Limited (“FMDQ Exchange” or the “Exchange“), has listed the LFZC Funding SPV PLC ₦25.00 billion Series 2 Fixed Rate Bond under its ₦50.00 billion Bond Issuance Programme on the Exchange’s Platform. This issuance, by LFZC Funding SPV PLC (“LFZC SPV” or the “Issuer“), has broken a record as the corporate bond issued with the longest tenor – 20 years – in the Nigerian debt markets.

LFZC SPV is a special-purpose vehicle set up by Lagos Free Zone Company to raise finance through the listing of debt securities, which would be used to boost its business expansion exercise and to restructure the company’s debts over a specified period. The Lagos Free Zone, covering an area of eight hundred and thirty (830) hectares, is the first private sector-led initiative in Nigeria.

To commemorate this notable event, FMDQ Exchange hosted the Issuer, Lagos Free Zone Company, represented by the Chief Executive Officer, Mr. Dinesh Rathi and other representatives of Lagos Free Zone Company. Also present at the Ceremony were the sponsors of the issue and Registration Member (Listings) of FMDQ Exchange – Stanbic IBTC Capital Limited, FCMB Capital Markets Limited and FSDH Capital Limited, as well as other parties to the issue.

Ms. Tumi Sekoni, Managing Director, FMDQ Exchange, whilst welcoming the guests, congratulated the Issuer and went on to express FMDQ Exchange’s pleasure at the listing of the LFZC SPV bond on its platform, stating that this is yet another highly exemplary and indeed, positive step towards addressing some of the infrastructural challenges in the nation. She further stated that FMDQ Exchange, being an Exchange with a passion for infrastructure and sustainable development in Nigeria, has again demonstrated its unflinching commitment in this regard by providing due diligence and availing its credible and efficient platform for the listing and trading of debt securities.

Mr. Dinesh Rathi, whilst delivering the special address, stated “this is a milestone transaction for us at Lagos Free Zone Company and it is a testament to the capacity of the Nigerian debt markets as a veritable source of domestic capital for infrastructural development in Nigeria. The response to this bond programme further strengthens our commitment to realise our vision and thereby enhance Nigeria’s competitive positioning with our continuous focus on Ease of Doing Business parameters and world class infrastructure, embedded with all modern facilities. We are particularly excited by the confidence demonstrated by Pension Fund Managers and other institutional investors at this milestone issuance, and we appreciate the team at Infrastructure Credit Guarantee Company Limited (“InfraCredit”), Stanbic IBTC Capital Limited and other parties to the transaction for this novel structure, which helps to de-risk the transaction and aligns the interest of different stakeholders.”

Delivering the sponsor’s remarks, Stanbic IBTC Capital Limited, on behalf of the other sponsors to the listing, through its Chief Executive, Mr. Funso Akere, mentioned that “Stanbic IBTC Capital, FCMB Capital Markets Limited, FSDH Capital Limited and Radix Capital Partners are delighted to have acted as Issuing Houses to LFZC SPV’s ₦25.00 billion 13.25% 20-year Infrastructure bond issuance, which is the second issuance under its ₦50.00 billion bond issuance programme. The Series 2 Bond Issuance was 139 subscribed and attracted wide participation from pension funds who have a growing demand for quality long-dated debt instruments. The success of the transaction demonstrates investors’ confidence in Lagos Free Zone Company and the free zone’s impact on socio-economic and industrial development in Nigeria. We expect this should encourage other corporates to tap the domestic capital markets to raise local currency funding for viable infrastructure projects.”

According to Mr. Chinua Azubike, Chief Executive Officer, InfraCredit, guarantor to the bond “this is yet another milestone transaction, and we are pleased to have supported the successful issuance of this Series 2 Bond following the maiden issuance in 2021. The success of special economic zones in Nigeria is critical to accelerating industrialisation, attracting local and foreign direct investment, job creation, and inclusive growth, however one key barrier we have unlocked with our guarantee, is enabling companies like Lagos Free Zone Company access up to twenty (20) year local currency finance from domestic pension funds at scale to match the long-term lifecycle of infrastructure investment needed to develop these zones, it is evident that local pension fund investors are playing an important role in supporting private sector led infrastructure development in Nigeria.

FMDQ Exchange is a member of FMDQ Group PLC, Africa’s first vertically integrated financial market infrastructure (“FMI”) group, strategically positioned to provide registration, listing, quotation and noting services; integrated trading, clearing & central counterparty, settlement, and risk management for financial market transactions; depository of securities, as well as data and information services, across the debt capital, foreign exchange, derivatives and equity markets, through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited. As a sustainability-focused FMI group, FMDQ Group, through FMDQ Exchange, operates Africa’s premier Green Exchange – FMDQ Green Exchange – positioned to lead the transition towards a sustainable future.

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