Nairaland Forum

Welcome, Guest: Join Nairaland / Login / Trending / Recent / New
Stats: 1237965 members, 1649546 topics. Date: Wednesday, 23 April 2014 at 07:46 AM

Osun N22bn Bond Offer Over-subscribed - Politics - Nairaland

Nairaland Forum / Nairaland / General / Politics / Osun N22bn Bond Offer Over-subscribed (2707 Views)

Britain Deputy Prime-Minister Opposes Bond Plan For Visitors / Nigeria: UK Rescinded £3,000 Entry Bond On Nigerians - Ministry / Capital Oil Ifeanyi Uba Arrested Over N22bn Subsidy Fraud (1) (2) (3) (4)

(0) (1) (2) (Reply) (Go Down)

Osun N22bn Bond Offer Over-subscribed by Gbawe: 10:59am On Dec 18, 2012
Interesting news. Certainly, 100% State bond over-subscription is commendable. Aregbesola should simply remain focused and deliver on the development plans enunciated.


http://www.businessdayonline.com/NG/index.php/markets/bond-market/49175-osun-n22bn-bond-offer-over-subscribed

Osun N22bn bond offer over-subscribed
TUESDAY, 18 DECEMBER 2012 08:34 REMI FEYISIPO

The Osun State government N22 billion bond offer at the capital market was over-subscribed by more than 100 percent.
The state went to the capital market to raise N22 billion but eventually realised N45.1 billion which translates to over N100 percent over-subscription.

This was revealed in Osogbo, the state capital, at the completion ceremony between the state government and the joint issuing houses for a N30 billion – 14.75 percent fixed rate development bond (tranche 1) due in 2019.

Wale Bolorunduro, commissioner for finance, said the N22 billion bond also received 78 entries, which represents another unparalleled record in the annals of capital market transactions.

Also, the state’s bond issue also changed completely the face of the capital market with over 60 percent of the subscription cornered by the Pension Fund Administrators (PFA). This scenario represents a departure from the past in which offerings were dominated and snapped by the banks that normally played crucial roles in bond issuance.

Government said that this development validates the level of confidence long-term fund investors placed on the state.

Speaking at the ceremony, Governor Rauf Aregbesola noted that the confidence did not just come but for the prudent management and financial engineering of his administration.

He described the transaction as a landmark bond, which has recorded a lot of firsts in Nigeria, saying that for the first time, the state was rated with bond rating of A and A-. Besides, since the creation of the state in 1991, it had no account but within 24 months of his administration, a standard accounting record was put in place, which Augusto rating agency few months ago rated A-.

All these successes, Aregbesola attributed to accountability, transparency and prudent financial system developed by his government, saying this would have been a mission impossible some years back.

He revealed that his administration met an insolvent state, which could not even meet its statutory obligations, saying his government had to source for a billion naira to meet these obligations.

“When we were to begin this, it was as if we were going on an impossible journey. And this is for a good reason: we met an insolvent state, a state that must pay more than N1 billion to meet its statutory obligations.

“The sheer impossibility of this was what informed the misread or the hallucination of the opposition in citing all sorts of figures. First, they said we are taking N200 billion. Later they said N150 billion. The last figure they quoted was N7.5 billion.

“The sheer impossibility of our efforts informed the hallucination. They just want 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, has no account. And a government that is just 24 months old could develop an account that Augusto and Co. and the other rating agencies could rate A and A-, this is amazing. We must congratulate ourselves for such sudden flight that attracted the highest corporate and financial affection as we now get at the capital market.

“I want to tell our traducers, who would always want to see evil in us and what they could profit from it, better think twice that this collection of the best in Nigerian financial industry cannot be here for the fun of it”, Aregbesola said.

He noted that it is an uphill task taking a state from zero or sub-zero level to an enviable height where the capital market and Securities and Exchange Commission (SEC) could vouch for it.

Speaking on behalf of the joint issuing houses, Taiwo Okeowo said that it was in recognition of the successes recorded by Aregbesola’s administration that the offer was over-subscribed by more than 100 percent.

2 Likes

Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 1:33pm On Dec 18, 2012
Contrast with Oyinlola who took a much condemned 18.38 billion loan at the twilight of his tenure.


http://dailyindependentnig.com/2012/08/osun-to-raise-n30b-bond-to-fund-infrastructure-projects/


Osun to raise N30b bond to fund infrastructure projects
POSTED ON MONDAY, AUGUST 27TH, 2012


Photo : Aregbesola

By Rotimi Durojaiye Group Business Editor, Lagos

The government of Osun State at the weekend indicated its resolve to raise a N30 billion bond from the capital market to fund its infrastructure projects.

Commissioner for Finance, Economic Planning and Budget, Dr. Wale Bolorunduro, who disclosed this during an interaction with Business Editors at Osogbo, the state capital, said the process has reached regulatory level at the Securities and Exchange Commission (SEC).

According to him, the bond with seven years long term payment would be utilised to fund developmental projects like roads, housing, water and agriculture.

Bolorunduro listed the Gbogan-Osogbo, Osogbo-Iwo roads among those to be given priority by the government after accessing the bond.

He said all documentations on the credit had been perfected and that it would be ready within the next one month.

The Commissioner explained that approaching the capital market is one of the best methods of funding developmental projects, stressing that “it is suicidal to do developmental projects with commercial loans”.

He said the state government is looking for long concessionary loans from global financial institutions like the World Bank and China Exim Bank.

Bolorunduro said with the automation of the internally generated revenue (IGR) process by the Ogbeni Rauf Aregbesola’s administration, the state’s IGR has gone up from N300 million monthly when the government took over power to N600 million monthly.

He said the government has succeeded in blocking all leakages in the areas of agriculture produce and forestry.

According to the Finance Commissioner, the government of Osun State is looking beyond PAYE (Pay As You Earn) as the only source of revenue generation, saying that it has come up with modern and robust methods of making money.

He added because the government has been sensitising the general public on its developmental programmes, high net individuals now come around to pay their taxes.

Bolorunduro made it known that the government’s five-year revenue generation target for the state is to attain N21 billion per annum.

In his words, the plan in the medium term in 2015 is to be at par with Lagos, and that the state is eager to use physical strategy to improve its local economy.

He said because of the deliberate attempt of government to spend more money on capital projects, it earmarked 56 percent of this year’s budget for capital expenditure with the balance of 44 percent for recurrent expenditure.

Bolorunduro added that the strategy in future is to set aside 70 percent for capital expenditure and 30 percent for recurrent expenditure.

He said the government has achieved more than 60 percent performance on the 2012 budget.
Re: Osun N22bn Bond Offer Over-subscribed by Dudu_Negro: 4:10pm On Dec 18, 2012
so.......what does Osun need the 30 billion for?

2 Likes

Re: Osun N22bn Bond Offer Over-subscribed by Demdem(m): 4:45pm On Dec 18, 2012
No doubt investors have full confidence in the administration of ogbeni Aregbe.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 4:54pm On Dec 18, 2012
Demdem: No doubt investors have full confidence in the administration of ogbeni Aregbe.

This is the crux of the matter. I rate Aregbesola's high on his fiscal management skills. Apparently, others do too. Suffice to say this translates into much needed funds to carry out many overdue capital projects.
Re: Osun N22bn Bond Offer Over-subscribed by seunfly: 6:09pm On Dec 18, 2012
Dudu_Negro: so.......what does Osun need the 22 billion for?
This is a good question, if you are going to use our state to raise money we need to know what his using it for, we need to see his master plan, how he will spend it, what he will spend it on, how to pay it back and the benefit of it on the peaple So that we can monitor it and see the effect peaple and the state as a whole. Atleast Obama first term in office he highlighted what he wanted to use the chinesse loan for and peaple judged him base on the poor performance of that loan, now he is working to clear the mess.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Standing5(m): 8:15pm On Dec 18, 2012
if i must add, so far the man has done well, But it will be better if we still get to know what the N22Billy is going to do. At least the majority of it.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Dudu_Negro: 10:32pm On Dec 18, 2012
Standing5: if i must add, so far the man has done well, But it will be better if we still get to know what the N22Billy is going to do. At least the majority of it.

....down to the last #1000 of the loan.


seunfly:
This is a good question, if you are going to use our state to raise money we need to know what his using it for, we need to see his master plan, how he will spend it, what he will spend it on, how to pay it back and the benefit of it on the peaple So that we can monitor it and see the effect peaple and the state as a whole. Atleast Obama first term in office he highlighted what he wanted to use the chinesse loan for and peaple judged him base on the poor performance of that loan, now he is working to clear the mess.

....the bond is expected to mature in 2019, thats 7 yrs from now This money is envisioned for new projects and im suspecting perhaps for tourism, agro, arts and industries. Osun clearly can generate a lot of money in a short term and earn good foreing credits in the area of arts and tourism and become the Mecca of Africa and a scholarship center as well but it will need to expand lodging, and hospitality to world class standard, improve community policing and security, improve communications and many other new improvements to attract and sustain the interest and patronage of the many adherents and long lost Yorubas in diaspora whether in Europe, America or anywhere else who are eager to find a new meaning and purpose in their life. Westerners are tired of Church and Mosque and want something else. Osun can fill in the gap and provide that something else.

Have you guys seen the graphic arts and animation used to sell Lekki FTZ and the Eko Atlantic?

Osun need a similar branding to market the Yoruba history and antiquity. Ifa adherents will be turned off and wary of a tradition in which the custodians of its history, Ooni and Alaafin, are throwing jabs and disputing about one another's authority.

In order for Osun to sell arts and culture and become the Mecca and scholarship center of learning for Ifa adherents and temples, it will need to partner with all the 16 sons of Ife and their 7 states.......this will encompass the whole commonwealth.....Bini and Ilorin included. When you tell western tourists in Ife the history of the 7 Yoruba states they will want to head to each and record their experience and match with published accounts. When you talk about Old Oyo and Afonja, they will want to visit Afonja's outpost and see for themselves. They are naturally adventorous and we have to accomodate their adventure which will translate to opening our societies and communities to foreigners but it also generate the necessary distribution of wealth at the grassroot level ....from something as little and inconsequential as the sale of souvenirs to big projects like Hollywood coming in to document or doing scripts on Yoruba myths and civilization.

Sinking #22billion into a vision that has no sustainability is bad. Besides, if they were planning to investvthis money in agro and industrial buildout, the roi will not materialize in 7yrs, the expected maturity dates for the bonds.

So, again, what is this money intended for?
Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 8:20am On Dec 19, 2012
Standing5: if i must add, so far the man has done well, But it will be better if we still get to know what the N22Billy is going to do. At least the majority of it.

My guy, Osun has clearly laid out the spending plan of the state on many occasions. To go to the bond market as a State, you must clearly enunciate your spending plan and the expected results of your usage of realised funds otherwise no one will subscribe. Osun has done this very well. We are all educated men and no one joined NL to be a teacher to others or to defend every article they submit here while others wallow in intellectual laziness.

I truly mean no disrespect but the one thing I wish for passionately is that Nigerians develop a love of reading and a mind hungry for knowledge which happens to be readily available in this 'information age'. The broad outline has been defined several times. Why not petition the right authority and gain specific information you can even bring here, to aid the development of political sophistication on this forum, rather than speak as if anyone owes you anything regarding information you can obtain yourself if you really want knowledge?

What hope for Nigeria when followership is too intellectually lazy to be up to speed with plans of leaders let alone hold them responsible for delivering on said plans? We should all try hard to be informed critics. It is the basis for assessing whether leaders are failing or succeeding.


http://www.businessdayonline.com/NG/index.php/markets/companies-and-market/43479-osun-to-raise-n30bn-from-capital-market

Osun to raise N30bn from Capital Market
TUESDAY, 28 AUGUST 2012 00:00 REMI FEYISIPO


Osun State Government has revealed that it is set to raise a N30 billion bond from the capital market, in order to finance developmental projects.

Commissioner for Finance,Economic Planning and Budget,Wale Bolorunduro who disclosed this in Osogbo, during a chat with BusinessDay, said arrangements had reached an advanced stage and awaiting the approval of the Federal Ministry of Finance and the Securities and Exchange Commission (SEC) adding that “in the next one month ,we will hit the capital market.”

He also said the bond would be used for viable projects like roads, especially the road linking the state capital,Osogbo to Gbongan, observing that the road was bad and an embarrassment to the state.

Apart from this, he revealed that roads in major cities of the state would be done like the Osogbo /Iwo road, as well as other viable roads which are meant to boost commercial activities of the state.


Lamenting infrastructure decay in the state, Bolorunduro stated that the bond would be used for other developmental projects,especially dilapidated school buildings

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by geeez: 8:30am On Dec 19, 2012
Investor confidence
Re: Osun N22bn Bond Offer Over-subscribed by 401kk: 8:58am On Dec 19, 2012
Na So! #22 billion to build sub-standard roads.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Dudu_Negro: 10:27am On Dec 19, 2012
Osun to raise N30bn from Capital MarketTUESDAY, 28 AUGUST 2012 00:00 REMI FEYISIPO Osun State Government has revealed that it is set to raise a N30 billion bond from the capital market, in order to finance developmental projects.Commissioner for Finance,Economic Planning and Budget,Wale Bolorunduro who disclosed this in Osogbo, during a chat with BusinessDay, said arrangements had reached an advanced stage and awaiting the approval of the Federal Ministry of Finance and the Securities and Exchange Commission (SEC) adding that “in the next one month ,we will hit the capital market.”He also said the bond would be used for viable projects like roads, especially the road linking the state capital,Osogbo to Gbongan, observing that the road was bad and an embarrassment to the state.Apart from this, he revealed that roads in major cities of the state would be done like the Osogbo /Iwo road, as well as other viable roads which are meant to boost commercial activities of the state.Lamenting infrastructure decay in the state, Bolorunduro stated that the bond would be used for other developmental projects,especially dilapidated school buildings

General Gbawe,

Thank you for sharing the article copied above..I also want to thank you for the instruction on doing due dilligence with information and wise use of logic. In fact I fault myself sometimes for being over analytic on simple stuffs that truly do not need the scrutiny. You have not been fair in your assessment of the protocol. You assumed that investors have much to loose from a non-viable and poorly presented forecast but are you sure, given the prevalent culture of chop-i-chop, that invesrirs care aboutthe clarity in Osun's proposal?

I am playing the DAWN's troubleshooter role here. We need accountability to make DAWN succeed. We need to distance from the culture of tell me and embrace the culture of "show me"......we need to inspect!

I hope you will join in the new passion for a successful and transformative Yorubaland. Our new slogan should be "project show me". When we cranck up our demand for performance the leaders will supply us competence in leadership.

Anyho, I read the article and wish to say the projects outlined above should be accomodated within the state's budget. They can create a nominal tax or even motor vehicle fee to cover cost of road repairs. Tell them to use tax incentives and waivers to obtain sponsorahip for school buildings.

You cannot go into debt to build roads which are not designed to self-finance, and even if you were to toll these roads 7yrs is insufficient term to recover this debt on maturity. If its not paid off in 2019 then you must raise more debts to service the bonds. The investors are never the loosers in theae types of deals.

The question still remains, what is the money going to be used for? Roads and schools can be financed far much easier using alternative means to generate the needed rwvenue.

3 Likes

Re: Osun N22bn Bond Offer Over-subscribed by aletheia(m): 10:49am On Dec 19, 2012
Gbawe:
Contrast with Oyinlola who took a much condemned 18.38 billion loan at the twilight of his tenure.
The difference is that between six and half a dozen.
Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 11:44am On Dec 19, 2012
aletheia:
The difference is that between six and half a dozen.

Oyinlola took a relatively expensive loan to build six Stadiums as if Osun was planning to host the Olympics. Go figure. I don't know how you can compare the loan granted to Oyinlola, with stringent conditions, to the longer term bond utilisation under discussion here.

http://www.punchng.com/news/we-advised-oyinlola-against-n18-38bn-loan/

‘We advised Oyinlola against N18.38bn loan’

SEPTEMBER 5, 2012 BY TUNDE ODESOLA

former Osun State governor, Olagunsoye Oyinlola
| credits: cfanet.org
Key officials in the administration of Prince Olagunsoye Oyinlola have said they advised the former governor against taking a loan of N18.38bn.

Testifying before a six-member panel of inquiry set up by Osun State Government on Tuesday, ex-Head of Service, Mr. Segun Akinwusi, described the loan as “messy and scandalous.”

In a memo submitted to the panel, Akinwusi said, “The loan was a sad page in the history of Osun State,” adding that the “loan is a messy affair in which some people were telling half truths or no truth at all.”

Akinwusi accused top government officials in the Oyinlola administration of performing ignoble roles in the loan, adding that projects for the loan were abandoned.

The former HoS, who retired a few weeks ago, said it was wrong to expend the loan on non-income yielding projects, adding that it was wrong of Oyinlola to take the loan at the twilight of his tenure.

“It was wrong to take the loan which cannot pay itself. You don’t take loan for social projects. There were contradictions by government agencies on the loan,” Akinwusi said.

Also, the Permanent Secretary, Ministry of Finance, Mr Abiodun Akintaro, said he advised the ex-governor against taking the loan.

Akintaro, however, said when the decision to take the loan was finally taken, he had to support it because it had become a collective decision.

Chairman, Osun State House of Assembly Appropriation Committee, Mr Femi Farounbi, said it was appropriate for the Oyinlola government to obtain the loan and spend it on building six stadiums across Osun.

But the Chairman of the panel, Prof Femi Odekunle, queried the appropriateness of constructing six stadiums when the state was facing economic challenges.

Odekunle also queried the rationale behind the construction and the abandonment of Radison Hotel, a project by the state government.

Farounbi said neither him nor his committee was aware of the terms of the loan
Re: Osun N22bn Bond Offer Over-subscribed by slimming: 11:50am On Dec 19, 2012
wonderful
Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 12:00pm On Dec 19, 2012
http://www.punchng.com/politics/osuns-n18-3bn-controversial-loan/


Osun’s N18.3bn controversial loan

NOVEMBER 18, 2012 BY TUNDE ODESOLA

Osun State Commissioner for Finance, Economic Planning and Budget, Dr. Wale Bolorunduro, and the Chairman of the state Peoples Democratic Party, Mr. Gani Olaoluwa, in these interviews with TUNDE ODESOLA speak on the inquiry into the N18.3bn loan obtained by the Olagunsoye Oyinlola’s administration

PDP should bury its heads in shame — Bolorunduro

The Professor Femi Odekunle-led panel of inquiry investigating the N18.38bn loan obtained by Oyinlola’s administration indicted the former governor for mismanagement. What’s your view on the report?

The panel is certainly made up of reputable technocrats distinguished by their commitment to the development of Osun State. Going by the manner the panel conducted itself, it was obvious that equity, fairness, transparency and accountability were the watchwords guiding its activities. However, I would not want to comment on the report because my comment will neither add nor reduce to it. The report of the panel was borne out of the submissions by those that appeared before it and the investigations conducted by members. The panel conducted its sittings openly and dispassionately, and I think this informed the decision by former Governor Olagunsoye Oyinlola to appear before it. The panel’s indictment of the former governor and other officials is only a warning to people in public offices to be wary of their conducts while in office because our actions and inactions would be accounted for at the end of the day.

But Oyinlola and Osun Peoples Democratic Party have insisted that the loan was taken in the interest of the masses.

The loan was irresponsible and misguided. It was capable of shutting down the economy of Osun State. In talking about the loan, we must be mindful that only the truth, facts and figures would suffice and make a meaning to the people of Osun. Why is it that the monthly repayment obligation of N619m on the facility was calculated by the United Bank for Africa based on the whole facility amount – irrespective of the undisbursed portion?

Our review and findings on the projects financed with the loan facility showed that the level of milestone reached by the contractors – as indicated by the various certificates of completion — was abysmally low when compared to the level of disbursement. In addition, the manner of management of the facility by the lender led to our decision to negotiate a fresh and well-structured N8.3 bn term loan from First Bank of Nigeria so as to take out the UBA loan. Mind you, the Oyinlola administration admitted that it had spent N10bn of the N18.3 bn loan. So, Osun was saddled with N8.3bn loan burden. And this was why we had to negotiate the remaining N8.3bn from UBA to First Bank. Pray, why take such a gigantic loan a few months to the end of your tenure? There’s something sinister about the hurry in the obtainment of the loan. First Bank loan has a moratorium of one year with a 60-month tenor while the UBA loan is without a moratorium and has 36-month tenor. While the First Bank loan has an annual interest rate of 10 per cent with 0.75 per cent annual management fee, the UBA loan has an annual interest rate of 13 per cent with 1 per cent annual management fee.

Do you mean that the loan has no benefit whatsoever for the state?

Exactly! It shows the PDP is made up of cultural reductionists and how else can he explain the fact that he released N430m public funds to build Radisson Hotel without following due process? He signed off the fund and broke all the financial regulations. He blamed the court for sacking him and that he would have gone after the company. The question is that how can he recover the funds that was disbursed without transaction trail or legal agreement duly vetted by the Ministry of Justice? The same financial recklessness was displayed in the Free Trade Zone transaction, in which Osun lost N1.5bn. That is not how to accept responsibility! It is alien to our culture and PDP members should just bury their heads in shame. It would shock you that the Oyinlola administration negated the purpose for which the loan was taken.

What’s your position on the tenor of the loan which has generated controversy?

Given the lean resources of Osun, it is unreasonable to negotiate such a substantial loan with a 36-month tenor. How can a state survive by using more than 32 per cent of its revenue for servicing a loan at a time when its personnel and overhead costs were already over 100 per cent of its statutory revenue? The allegation that the Rauf Aregbesola administration took N25bn from First Bank is fallacious. The referenced N25bn facility being claimed as loan by the PDP is a credit line and only the sum of N8.3bn used to pay down the UBA facility was drawn to date. The state’s obligation is limited only to N8.3bn. Knowledge of financial and treasury management shows that a credit line is not a loan until it has been drawn and this government has not drawn from the facility. The records are there for everyone to see. Our strategy of restructuring the referenced term loan is first, to convert it to a long term obligation that it should be, and then take it out by sourcing a cheaper debt instrument (developmental bond) from the capital market. Osun does not owe any financial institution.
Re: Osun N22bn Bond Offer Over-subscribed by aletheia(m): 1:38pm On Dec 19, 2012
Gbawe:
Oyinlola took a relatively expensive loan to build six Stadiums as if Osun was planning to host the Olympics. Go figure. I don't know how you can compare the loan granted to Oyinlola, with stringent conditions, to the longer term bond utilisation under discussion here.

http://www.punchng.com/news/we-advised-oyinlola-against-n18-38bn-loan/
1. My point is this: I don't trust any politician of whatever hue (especially our state governors who have a penchant for profligate financial recklessness) that take out loans and further push their states into indebtedness. Depending on your viewpoint, any loan can be justified. Aren't there other means through which Osun could have raised the necessary funds such as increasing IGR, plugging loopholes for waste and corruption, a public-private partnership etc.

2. When it comes to issues such as these, my own opinion is that the people's voice should be heard. Did the people of Osun agree to this? Will they have to pay for this in future through increased taxation &c?

3. It is possible that the current governor of Osun may prudently utilize the funds but only time will tell.

4. Trust no politician.

3 Likes

Re: Osun N22bn Bond Offer Over-subscribed by HNosegbe(m): 2:06pm On Dec 19, 2012
Dudu_Negro:
You cannot go into debt to build roads which are not designed to self-finance, and even if you were to toll these roads 7yrs is insufficient term to recover this debt on maturity. If its not paid off in 2019 then you must raise more debts to service the bonds. The investors are never the loosers in theae types of deals.

The question still remains, what is the money going to be used for? Roads and schools can be financed far much easier using alternative means to generate the needed revenue.

The bolded is the crux of the matter. I really don't understand how and why a government should take a loan to construct a road when the means for recovering the funds. Basic finance tells us that for borrowing to be feasible for any project, the expected returns from the project MUST surpass the cost of funds. Now for a loan with 14.75 percent coupon rate, HOW EXACTLY will the returns from the roads constructed and dilapidated buildings rebuilt EXCEED this rate? How will the state prevent a situation where debt servicing begins to eat up a major chunk of the annual budget, as is the case with the FG?

I'm not convinced.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by anonimi: 10:13am On Dec 20, 2012
Demdem: No doubt investors have full confidence in the administration of ogbeni Aregbe.

The same way the investors in UBA had 'full confidence in the administration of" Oyinlola
Re: Osun N22bn Bond Offer Over-subscribed by anonimi: 10:23am On Dec 20, 2012
aletheia:
1. My point is this: I don't trust any politician of whatever hue (especially our state governors who have a penchant for profligate financial recklessness) that take out loans and further push their states into indebtedness. Depending on your viewpoint, any loan can be justified. Aren't there other means through which Osun could have raised the necessary funds such as increasing IGR, plugging loopholes for waste and corruption, a public-private partnership etc.

2. When it comes to issues such as these, my own opinion is that the people's voice should be heard. Did the people of Osun agree to this? Will they have to pay for this in future through increased taxation &co?

3. It is possible that the current governor of Osun may prudently utilize the funds but only time will tell.

4. Trust no politician.

Your question is partly answered by the quote below from one of Gbawe's justification posts:

He also said the bond would be used for viable projects like roads, especially the road linking the state capital,Osogbo to Gbongan, observing that the road was bad and an embarrassment to the state.

Apart from this, he revealed that roads in major cities of the state would be done like the Osogbo /Iwo road, as well as other viable roads which are meant to boost commercial activities of the state.

* Now does anyone know how many kilometres for these TWO roads?
* Are they to be constructed afresh from forests?
* Or are they to be renovated/rehabilitated/renovated?
* N22b just for rural state roads that already exist shocked
* Aregberascal must have learnt something from the "excellent" Lagos governor who handed over Lekki government road to his godfather, Tinubu to collect fraudulent tools and used mobile policement to quell activists who protested!!!

Association of Conmen in Nigeria (ACN)

Again, what is the difference between six and half a dozen
Re: Osun N22bn Bond Offer Over-subscribed by emiye(m): 12:14pm On Dec 20, 2012
anonimi:

Your question is partly answered by the quote below from one of Gbawe's justification posts:



* Now does anyone know how many kilometres for these TWO roads?
* Are they to be constructed afresh from forests?
* Or are they to be renovated/rehabilitated/renovated?
* N22b just for rural state roads that already exist shocked
* Aregberascal must have learnt something from the "excellent" Lagos governor who handed over Lekki government road to his godfather, Tinubu to collect fraudulent tools and used mobile policement to quell activists who protested!!!

Association of Conmen in Nigeria (ACN)

Again, what is the difference between six and half a dozen



Do you actually think you are making sense? How did you conclude that 22billion is meant for two roads?

That you are physically lazy to read or intellectually lazy to comprehend does not mean you expose yourself openly.

Commissioner for Finance, Economic Planning and Budget, Dr. Wale Bolorunduro, who disclosed this during an interaction with Business Editors at Osogbo, the state capital, said the process has reached regulatory level at the Securities and Exchange Commission (SEC).

According to him, the bond with seven years long term payment would be utilised to fund developmental projects like roads, housing, water and agriculture.

Bolorunduro listed the Gbogan-Osogbo, Osogbo-Iwo roads among those to be given priority by the government after accessing the bond.

If you will criticize, make it constructive, that way it will elevates the discussion, not the rubbishh you have done
Re: Osun N22bn Bond Offer Over-subscribed by anonimi: 1:05pm On Dec 20, 2012
emiye:

Do you actually think you are making sense? How did you conclude that 22billion is meant for two roads?

That you are physically lazy to read or intellectually lazy to comprehend does not mean you expose yourself openly.

If you will criticize, make it constructive, that way it will elevates the discussion, not the rubbishh you have done

For someone who is keen to celebrate mediocre awards to thieving governors:

http://www.nairaland.com/1085017/ogun-state-governor-amosun-emerges

http://www.nairaland.com/1065854/governors-forum-greets-acn-governor#12430410


I guess I should know where you are coming from and what you are all about.
Enjoy the crumbs from your paymasters while the Yoruba people get r.aped by these pseudo-progressive "saviours".

BTW, how much did Awolowo raise from the capital market or borrow from banks for the groundbreaking achievements during his administration over the entire Western region
How much did the UPN governors borrow as debt to saddle future, unborn generations in the Southwest & old Bendel state to deliver on the four cardinal programmes of their party that included

* FREE education with books
* FREE primary health



Association of Conmen in Nigeria (ACN)

What is the difference between six and half a dozen
Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 2:06pm On Dec 20, 2012
HNosegbe:

The bolded is the crux of the matter. I really don't understand how and why a government should take a loan to construct a road when the means for recovering the funds. Basic finance tells us that for borrowing to be feasible for any project, the expected returns from the project MUST surpass the cost of funds. Now for a loan with 14.75 percent coupon rate, HOW EXACTLY will the returns from the roads constructed and dilapidated buildings rebuilt EXCEED this rate? How will the state prevent a situation where debt servicing begins to eat up a major chunk of the annual budget, as is the case with the FG?

I'm not convinced.

Throughout the world, governments borrow to aid infrastructural development and I think we do not need to belabour that point here. You have to first and foremost accept that Governing a State is not akin to running a business and I don't see your angle when you talk of "expected returns from the project MUST surpass the cost of funds" when this issue is purely about developing a State and a people optimally. That is Governance and we must separate it from considerations pertinent only to running profit-driven entities. The main consideration here is purely to do with income. As long as the State has reliable income and continue to grow its IGR, as Aregbesola plans, then there is nothing at all wrong with this move.

We should all remember that Osun merely has to service the interest and pay the principal back on maturity. The State can achieve this in many ways given the arrangement is over many years and I think it is rather presumptuous of us to think the financial experts on all sides of this do not appreciate the basics of financial forecasting. That is why I believe we must all follow the plans of leaders so we understand their actions more. Aregbesola has stated many times that Osun needs over a billion dollars to address pressing needs of the State. The concept is for Osun to have the bulk of the money it needs today and accumulate what it spends over years. Entirely feasible and normal.

I think because our politicians take so much and give us nothing in return, we are now a paranoid and suspicious people to the extent we do not see or appreciate what is normal, routine and indeed legitimate action of governance worldwide. Throughout the world, government issue treasury bills and use bonds to raise money for action plans. There is no responsibly proactive administrator in the world that will not do what Aregbesola is doing. It is basic governance. The man has stated it many times that Osun cannot develop on FG allocation alone. He has clearly enunciated that increasing IGR aggressively and raising funds through the money market is a veritable way out of the conundrum. This is a legitimate course of action because the need to develop a State and a people optimally is not a profit and loss affair . Let us not confuse issues. State and municipal bonds are commonly used worldwide for the purposes Osun sets out.

http://en.wikipedia.org/wiki/Municipal_bond

Purpose of municipal bonds

Municipal bonds are securities that are issued for the purpose of financing the infrastructure needs of the issuing municipality. These needs vary greatly but can include schools, streets and highways, bridges, hospitals, public housing, sewer and water systems, power utilities, and various public projects.



Municipal bond issuers
Municipal bonds are issued by states, cities, and counties, (the municipal issuer) to raise funds. The methods and traces of issuing debt are governed by an extensive system of laws and regulations, which vary by state.
Re: Osun N22bn Bond Offer Over-subscribed by aribisala0(m): 2:52pm On Dec 20, 2012
Gbawe: Interesting news. Certainly, 100% State bond over-subscription is[b] commendable[/b]. Aregbesola should simply remain focused and deliver on the development plans enunciated.


http://www.businessdayonline.com/NG/index.php/markets/bond-market/49175-osun-n22bn-bond-offer-over-subscribed



Commendable Why that a government reliant almost entirely on oil revenue is borrowing money to pay at nearly 15% interest? I believe condemnable is the word you are looking for??


Yes governments do borrow around the world. The idea that our resident "professor" wishes us to swallow is that they "must borrow" . I think this needs some clarification.
Why MUST THEY?. How much does China owe?

Governments may not borrow but let us leave that for another time.

Has anyone noticed the eye watering 14.75 % interest ?? This I believe is higher than what the FG gives for its 90 day paper but again the rates are in the same ball park and one hopes this is long term paper.. Anyone who has listened to the news recently will know that countries like Greece,Portugal Spain etc are in trouble financially.

Look at this link
http://www.tradingeconomics.com/greece/government-bond-yield

Greece is paying well under this 14.75% for 10 year paper.
So back to the government must borrow argument;

Must they borrow at any cost?

when does it become unreasonable to borrow?

These are questions well meaning citizenry must ask. In fact with government borrowing at this rate is there any need to work or do business. Where else can you get these kinds of returns? Caveat emptor! The reason why the yield is so high is because the market perceives the risk to be so high. i.e

The risk that Osun state may not pay up.This risk has a price= 14.75%.


It is massaging information to put it mildly ,when a government is borrowing at almost 15% and tells us its"BONDS ARE OVERSUBSCRIBED" Come on we are not that silly! That is for the creditor a pay back of 5 years (compounded) for original investment received AS INTEREST and the PRINCIPAL STILL UNPAID.

Our Professor BAWWY would have us believe this is good for Osun State. Well we hope they don't use the money to send their wives to Syria to learn about democracy!

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Paul John: 3:15pm On Dec 20, 2012
Aregbes management skill is commendable.

Standing5: if i must add, so far the man has done well, But it will be better if we still get to know what the N22Billy is going to do. At least the majority of it.

I'm presently in Osun. Ever since the creation of the state, I've never seen the type of massive project the present administration is embarking on. The only past governor who did something similar but far lesser than what Aregbe is doing was Adebisi Akande.

check this out to know what the N22billion is going to be spent on.

Osun signs N17.8b Osogbo-Kwara Boundary Road dualisation contract

Date: 2012-07-28

Osun State government has signed a N17.8 billion contract agreement with SAMMYA Construction Company Limited for the dualisation of the 45 kilometers Osogbo-Ikirun- Kwara State Boundary Road.

A statement from the state government made available to Saturday Mirror, says that the dualisation had been segmented into three of Osogbo-Dagbolu (International Market) to Alamisi Market in Ikirun (9.52 kilometers); Osogbo (Old-garage) to Ikirun junction road (20.5 kilometers) and Ikirun-IlaOdo- Kwara State Boundary road (16.5 kilometers). In signing the agreement on Thursday, the Special Adviser to the Governor on Works and Transport, Engineer Oladepo Amuda, said that, in line with the agreement, the project would be completed within 24 months of which the work had already commenced.

He said that the project was not the usual direct contract award, but a contractor- financing transaction, which came out of the confidence of the contractor in the administration of Governor Rauf Aregbesola, saying that the money for the contract would be repaid across 36 months after the completion of the project.

A development financial institution, The Infrastructure Bank Plc (TIB) which is the Transaction Advisor, Fund Arranger and Financier of the project, is working in conjunction with the construction company and other stakeholders to fund the project.

He further said: The road will link the market hub at Dagbolu with a spur from the major road to the market and from there to Alamisi Market in Ikirun. The major one will go from Old Garage and directly to Ikirun and to the Kwara State boundary
http://m.ilorin.info/fullnews.php?id=979



Osun set to inaugurate tourist-friendly park. Wednesday, 05 December 2012
TOURISTS and travellers passing through Osun State using the Ibadan–Ife Expressway will soon have a place to unwind, relax, bail out stress and travel fatigue as the Osun State Government is gearing up efforts at ensuring the completion of a multi–million naira tourists’ - friendly park before the year ends.

The park which is located at Gbogan junction, along the Ibadan–Ife Expressway is the initiative of Governor Rauf Aregbesola who believed that such a recreation centre is not only fit for the people of his state at this specific location, but a necessary incentive for tourists and travellers passing through the state to other parts of the country.

The park which is about 80 per cent completed is on three acres of land, giving enough room for the facilities in consideration of expected patrons and buyers.

The facilities therein are targeted at all for the purpose of recreation, fun, relaxation, sight–seeing, leisure and hospitality.

A tour of the park conducted by Tribune Tourism Magazine recently revealed alluring fountain to be erected on an Elephant’ effigy, public toilets, a multi–purpose event centre with function rooms, 12-bedroom hotel, police post, restaurant and bar, canteen, mechanic workshop, car wash bay, children recreation centre, love garden and parking lots tailored at giving the travelling masses a place to relax while on transit.

Though the park is under construction, the community has started benefitting from the few inquisitive travellers who stop at the junction to have a look at what is being constructed.

Madam Taiwo Adelani, middle-aged woman who hawks oranges at the junction has this to say: “I don’t really understand what Governor Aregbesola is doing there. But it seems it is a good project as it has compelled many people to stop to see what is in there. These people also buy one or two things from us. I am sure at completion, more people will come and that is more patronage for us.”

The park which has started to boost commerce at this junction, is also adding value to the environment through its unique design and aesthetics which parades the coat of arms of the state which proudly announces IPINLE OMOLUABI.
http://www.tribune.com.ng/news2013/index.php/en/tourism/item/502-osun-set-to-inaugurate-tourist-friendly-park
Re: Osun N22bn Bond Offer Over-subscribed by emiye(m): 3:46pm On Dec 20, 2012
anonimi:

For someone who is keen to celebrate mediocre awards to thieving governors:

http://www.nairaland.com/1085017/ogun-state-governor-amosun-emerges

http://www.nairaland.com/1065854/governors-forum-greets-acn-governor#12430410


I guess I should know where you are coming from and what you are all about.
Enjoy the crumbs from your paymasters while the Yoruba people get r.aped by these pseudo-progressive "saviours".

BTW, how much did Awolowo raise from the capital market or borrow from banks for the groundbreaking achievements during his administration over the entire Western region
How much did the UPN governors borrow as debt to saddle future, unborn generations in the Southwest & old Bendel state to deliver on the four cardinal programmes of their party that included

* FREE education with books
* FREE primary health



Association of Conmen in Nigeria (ACN)

What is the difference between six and half a dozen

Your nuisance value is legendary, Face this discussion if you can OR go to helll!

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by Standing5(m): 4:18pm On Dec 20, 2012
If Nigerians can blame lack infrastructure for other reasons like business failure, i see no reason why Aregbe's bond offer should be questioned. We all witnessed how Ogun state govt came up with the idea of a very expensive air conditioned overhead bridge not long ago. Ideas like these is what i am against. Aregbe should give us specifics, he should narrow down and hit the nail proper.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by anonimi: 4:20pm On Dec 20, 2012
aribisala0:

Has anyone noticed the eye watering 14.75 % interest ?? This I believe is higher than what the FG gives for its 90 day paper but again the rates are in the same ball park and one hopes this is long term paper.. Anyone who has listened to the news recently will know that countries like Greece,Portugal Spain etc are in trouble financially.

Look at this link
http://www.tradingeconomics.com/greece/government-bond-yield

Greece is paying well under this 14.75% for 10 year paper.
So back to the government must borrow argument;

Must they borrow at any cost?

when does it become unreasonable to borrow?

These are questions well meaning citizenry must ask. In fact with government borrowing at this rate is there any need to work or do business. Where else can you get these kinds of returns? Caveat emptor! The reason why the yield is so high is because the market perceives the risk to be so high. i.e

The risk that Osun state may not pay up.This risk has a price= 14.75%.


It is massaging information to put it mildly ,when a government is borrowing at almost 15% and tells us its"BONDS ARE OVERSUBSCRIBED" Come on we are not that silly! That is for the creditor a pay back of 5 years (compounded) for original investment received AS INTEREST and the PRINCIPAL STILL UNPAID.

Our Professor BAWWY would have us believe this is good for Osun State. Well we hope they don't use the money to send their wives to Syria to learn about democracy!

So much hogwash about "confidence" in Aregberascal's thieving administration. Guess I will have confidence if a government can GUARANTEE repaying my loan over five years simply paying interest while the principal remains.
Borrowing at a higher rate than seriously distressed Greece for a shorter period of seven years compared to 10 for Greece. shocked
Dem wan put dem people further into financial enslavement while their (Ishakole) Rent Collector Area Father on Bourdillon Road, Ikoyi, Lagos expands his political, economic and financial empire at the people's expense.
Re: Osun N22bn Bond Offer Over-subscribed by Gbawe: 6:03pm On Dec 20, 2012
Paul John: Aregbes management skill is commendable.



I'm presently in Osun. Ever since the creation of the state, I've never seen the type of massive project the present administration is embarking on. The only past governor who did something similar but far lesser than what Aregbe is doing was Adebisi Akande.

check this out to know what the N22billion is going to be spent on.










My guy, Osun folks know what they know. Aregbesola and his team should simply remain focused and shun detractors. It is the same with Nairaland. The plan to use bonds to derive funds is not new and is not even what matters ultimately. The funds required has been raised. As the State commissioner of Finance observes at the end, those who seek certain information should approach the right authority.


http://www.businessdayonline.com/NG/index.php/markets/companies-and-market/47936-low-igr-compels-states-to-go-for-bond-issuance




‘Low IGR compels states to go for bond issuance’
FRIDAY, 23 NOVEMBER 2012 00:00 REMI FEYISIPO
The Osun State government has said that the quantum of developmental agenda designed to transform the state and other South West states calls for a more detailed and strategic design, both in conceptualisation and the manner such projects are to be actualised financially.

Speaking with BusinessDay in Osogbo, the state capital, Wale Bolorunduro, the state’s commissioner for finance, said the “IGR is a case of “chicken or egg,” you must catalyse the economy before you can aggressively pursue IGR. Our shared passion for monumental capital projects is a strategy aimed at boosting economic activities in the region.”

According to him, this is so given the peculiarly limited monthly allocation from the Federation Account and the currently low Internally Generated Revenue (IGR) in the states, with the exception of Lagos.

Sustainable economic activities at micro level, he pointed out, is inevitable for enhancement of the states’ internal revenue, thus meaningful capital projects such as road and commercial infrastructure are proactive strategies to prevent our states from programmed extinction.

He said the rationales for choice of bond, as a preferred source of financing for government were its relative cheapness and longer tenor.

Lagos, Osun, Ogun and Oyo states are presently approaching the capital market for bonds of different amounts and the development has been criticised, especially by the opposition parties and some people in their states.

Reacting further to this, the Osun State commissioner for finance said the uncertainties of Nigerian money market and the implications of unpredictable fluctuations in money market rates on bank loan interest endear professional managers of states’ treasuries to developmental bond, whose coupon remains unchanged throughout an agreed tenor or period, adding that the yield on the fund comes to near single digit.

“Ironically, the rigours involved in getting bond issuance programme approved, particularly in the area of documentation and scrutiny from capital market regulatory authorities, is enough test of discipline, transparency, initiatives and vigour, the Investment and Securities Act of Nigeria 2007 can be consulted for details of the requirements and documentation for bond.
Re: Osun N22bn Bond Offer Over-subscribed by wesley80(m): 6:21pm On Dec 20, 2012
Interesting (grabs a seat).
Re: Osun N22bn Bond Offer Over-subscribed by aribisala0(m): 7:02pm On Dec 20, 2012
Gbawe:

My guy, Osun folks know what they know. Aregbesola and his team should simply remain focused and shun detractors. It is the same with Nairaland. The plan to use bonds to derive funds is not new and is not even what matters ultimately. The funds required has been raised. As the State commissioner of Finance observes at the end, those who seek certain information should approach the right authority.


http://www.businessdayonline.com/NG/index.php/markets/companies-and-market/47936-low-igr-compels-states-to-go-for-bond-issuance


You started this thread trying to persuade innocent passers-by and and unsuspecting onlookers that this is "commendable" when confronted with the most basic of analysis you retreat into your "ad hominem" and paranoid shell seeing "DETRACTORS" instead of citizens. Is it not a normal part of democracy to debate issues? Why did you start this thread ,for your cheerleaders to come and say Hallelujah? Surely people will question governance. Why does that make them "DETRACTORS"?

The question is a very simple one which I will illustrate will an extreme instance; Is it acceptable for governments to borrow at 100% interest ? specifically Osun State? If we agree ; NO ( YOU ARE WELCOME TO DISAGREE) then how much is too much 99,98,97 or what exactly.

The headline "BOND OVERSUBSCRIBED" is disingenuous at best and fraudulent at worst as any one familiar with the money market where these funds are coming from will tell us. 14.75% yield on your paper is what DESPERATE BORROWERS pay . There is NOTHING to celebrate there. At that rate of interest. The debt CANNOT be repayed unless the money is spent on a venture yielding a GREATER return.

HOW WILL THE PRINCIPAL EVER BE REPAYED.? I have not even addressed what the money is to be used for yet but that interest rate is the equivalent of asking a man to push a coconut up his yansh. I agree that MAN PASS MAN but a coconut is taking it too far.

THe BOND WAS NOT OVERSUBSCRIBED THAT IS A misrepresentation IF NOT QUITE A LIE

OSUN HAD TO OFFER A HIGHER RATE TO GET TAKERS FOR ITS PAPER


When a bond is OVERSUBSCRIBED one woul expect the YIELD to drop.

1 Like

Re: Osun N22bn Bond Offer Over-subscribed by wesley80(m): 7:10pm On Dec 20, 2012
Hehehehee, now watch Gbawe - the CTRL C + CTRL V intellectual resort to eediotic quotes from every conceivable newssite, assuming he picks up the gauntlet that is.

(0) (1) (2) (Reply)

Delta State SSG Honoured In Abuja / Read Nigeria Constitution On Citizenship And Make Up Your Mind On The Lebanese. / Do We Glorify Mediocrity In Nigeria?

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (0) (1) (2) (3) (4) (5) (6) (7) (8) (9)

Nairaland - Copyright © 2005 - 2014 Oluwaseun Osewa. All rights reserved. See Nairalist and How To Advertise
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.