Date Published: 05/12/10

Kaduna plans 10 billion naira debut bond

Kaduna is planning a debut 10 billion naira bond issue to help finance infrastructure projects, including a water treatment plant and specialist hospital, its governor said on Wednesday.

Kaduna Governor Namadi Sambo said in an interview published on the state government website that previous borrowing had largely been paid off and the state's domestic debt was minimal. No timing was given for the planned issue.

Credit ratings agency Fitch in September gave Kaduna long-term foreign and local currency ratings of 'B+' and a national long-term rating of 'A+(nga)'.

It said the ratings reflected Kaduna's growing tax base and an investment programme in infrastructure, particularly the power sector, which could unlock economic potential.
At least four of Nigeria's 36 states have issued bonds in recent months and others have said they plan to do so.

Analysts say falling yields on federal government bonds and low deposit rates at banks have encouraged investors to channel their funds into higher-yielding instruments including equities and state-government bonds.

Nigeria removed all taxes and cut transaction fees for sub-national and corporate bonds in March, further spurring interest in the fledgling debt market.

REUTERS