The Nigerian Capital Market during the week recorded an unprecedented feat as the Osun State’s N22 billion bond offer was oversubscribed by more than 100 per cent.
Governor Rauf Aregbesola announced this in Osogbo, the state capital, at the completion ceremony between the state government and the Joint Issuing Houses for a N30 billion – 14.75 per cent fixed rate development bond (tranche 1) due in 2019.
Aregbesola, who was represented by the Commissioner for Finance, Dr. Wale Bolorunduro, said the state went to the Capital Market to raise N22 billion, but raised N45.1 billion, which translates to more than a N100 per cent oversubscription.
He said the N22 billion bond received 78 entries, an unparalleled record in capital market transactions.
Over 60 per cent of the subscription was cornered by the Pension Fund Administrators.
This is a departure from the past, in which offerings were dominated by the banks.
The governor said this development validates the level of confidence long-term fund investors have in his administration.
He said the administration’s prudence was responsible for the confidence investors had in it.
Aregbesola described the tranasaction as “a landmark bond”.
He said for the first time, the state’s bond rating was A and A-. Since Osun’s creation in 1991, it had no account, but within 24 months of the Aregbesola administration, a standard accounting record was put in place, which Augusto Rating Agency recently rated A-.
The governor attributed all these successes to accountability, transparency and prudence, saying they would have been impossible some years back.
He said his administration met an insolvent state, which could not even meet its statutory obligations, adding that his administration had to source N1 billion to meet its obligations.
Aregbesola said: “When we began this, it was as if we were going on an impossible journey. This was because we met an insolvent state, which had to pay over N1 billion to meet its statutory obligations.
“The sheer impossibility of this was what informed the misreading or the hallucination of the opposition in citing all sorts of figures. First, they said we were taking N200 billion. Later they said N150 billion. The last figure they quoted was N7.5 billion.
“They just wanted to attack without having the correct information. I am happy that we are confounding them and we shall continue to confound them.
“This state, since its inception, had no account. It is amazing that an administration that is just 24 months old developed an account that Agusto and Co. and other rating agencies rated A and A-.
“We must congratulate ourselves for such a sudden flight, which attracted the highest corporate and financial affection as we now get at the Capital Market.
“I urge our traducers, who would always want to see evil in us and profit from it, to think twice that this collection of the best in the Nigerian financial industry cannot be here for the fun of it.”
He said it was an uphill task taking a state from zero or sub-zero level to an enviable height, where the Capital Market and the Nigerian Security and Exchange Commission could vouch for it.
The governor thanked the House of Assembly for its “rare” support in ensuring the success of the bond issue.
He thanked the people of the state for their support for his administration.
Speaking on behalf of the Joint Issuing Houses, Mr. Taiwo Okeowo said the success of the bond issue was a recognition of the achievements of the Aregbesola administration.
Describing the transaction as a breakthrough, Okeowo said: “With what is happening now, the governor is taking the state to an unimaginable height with the bond of development.”
