Continental Merchant Bank and the Nigerian Merchant Bank are to champion a consortium of banks to raise a N120 million standby facility for the Lagos State loan stock pending the floating of the remaining tracheas of the stock valued at the same amount.
This, The Republic gathered will take effect before the middle of December. The support facility is to insulate the remaining two tranches valued at N120 million from being stalled.
This follows the completion board meeting on Monday between officials of the Lagos State government, the issuing houses, and the trustees to the bonds.
The bond has a coupon rate of 17¬Ω per cen and a maturity date of 1999. According to officials of the issuing houses Continental Merchant Bank and Nigerian Merchant Banks application list for the bonds now being issued was opened at 8 am yesterday and will close 1.30 p.m on Friday, December 18, 1987.
The bond is tied to the development of the Lekki Peninsula Scheme I which is estimated to cost N383,199,000.
A breakdown of the estimated expenditure shows that the cost of demolishing illegal structures is N500,00 while compensation for buildings is expected to cost N4,801,000. Compensation for economic trees will cost N1,180,000 giving a total land cost of N6,481,000.
Also land improvement is expected to cost the state government the sum of N63,370,000. This will tak the form of hydraulic sand filling. Infrastructural development according to Lagos State officials is estimated to cost N295,024 million.
A further breakdown of the estimated shows an allocation of N134,640,000 to water supply and N36,000,000 to sewage.
Electricity is estimated to gulp frm the state coffers n41,794,000 drainage N13,940,000 while telecommunications will cost N20,000,000.
A capital allowance of 5% of total estimate is provided as contingency. This is estimate is recorded at N18,244,000. This gives a grand total of N383,119,000.
Monday‚Äôs meeting opens the floating of the state bonds with N30,000,000 being the first tranche. The balance of N120 million according to officials will be raised in two tranches of N60 million each over the next years.