BENUE STATE GOVERNMENT of NIGERIA Offer for Subscription
Total Page:16
File Type:pdf, Size:1020Kb
THIS DOCUMENT IS IMPORTANT AND SHOULD BE READ CAREFULLY . I F YOU ARE IN ANY DOUBT ABOUT ITS CONTENTS OR THE ACTION TO BE TAKEN , PLEASE CONSULT YOUR BANKER , S TOCKBROKER , A CCOUNTANT , S OLICITOR OR ANY OTHER PROFESSIONAL ADVISER FOR GUIDANCE IMMEDIATELY . F OR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS , SEE “RISK FACTORS ” COMMENCING ON PAGES 34 - 36 HEREOF. BENUE STATE GOVERNMENT OF NIGERIA Offer for Subscription N4,950,000,000 16.50% FIXED RATE 7 YEAR BOND ISSUE 2015/2022 Issue Price: N1,000.00 per unit Payable in full on Application Application List Opens: 27th February, 2015 Application List Closes: 27th February, 2015 This offering of 7 years 16.5% Fixed Rate Bonds (the “Issue”) is being made through a 100% Underwriting Process wherein 100% of the Issue shall be offered to Qualified Institutional Investors (“QIIs”) and High Net worth Individuals (“HNIs”) as defined under Rule 321 of the Rules and Regulations of the Securities & Exchange Commission (“the Commission” or the SEC”). This Prospectus has been registered by the Securities & Exchange Commission. It is a civil wrong and a criminal offence under the Investments and Securities Act No. 29, 2007 to issue a prospectus which contains false or misleading information. Clearance and registration of this prospectus and the securities which it offers does not relieve the parties of any liability arising under the act for false or misleading statements or for any omission of a material fact. The registration of this Prospectus shall not be taken to indicate that the Securities & Exchange Commission endorses or recommends the debt securities or assumes responsibility for the correctness of any statements made or opinions or reports expressed herein. Lead Issuing House/Underwriter Joint Issuing House/Underwriter RC: 444999 RC: 446599 This Prospectus is dated 27 t h , February 2015 TABLE OF CONTENTS 1 ABRIDGED TIMETABLE ..................................................................................................................................... 3 2 DEFINITION OF TERMS AND ABBREVIATIONS ................................................................................................ 4 3 INFORMATION RELATED TO THIS PROSPECTUS ............................................................................................. 7 4 PARTIES TO THE TRANSACTION ...................................................................................................................... 8 5 DECLARATION BY THE ISSUER ...................................................................................................................... 11 6 THE BOND ISSUE ............................................................................................................................................ 12 7 TERMS AND CONDITIONS OF THE BOND ISSUE .......................................................................................... 13 8 SUMMARY OF THE BOND ISSUE.................................................................................................................... 17 9 OVERVIEW OF THE NIGERIAN ECONOMY .................................................................................................. 20 10 PROFILE OF BENUE STATE ............................................................................................................................. 22 11 RISK FACTORS AND MITIGANTS .................................................................................................................. 34 11.1 COUNTRY RISKS ........................................................................................................................................... 34 11.2 MACROECONOMIC RISKS ............................................................................................................................ 34 11.3 POLITICAL RISKS AT THE STATE LEVEL .............................................................................................................. 35 11.4 RISKS RELATING TO THE BONDS ..................................................................................................................... 36 11.5 STRUCTURAL RISKS ........................................................................................................................................ 36 12 HISTORICAL FINANCIAL INFORMATION OF BENUE STATE ......................................................................... 38 12.1 REPORTING ACCOUNTANT REPORT ............................................................................................................... 38 12.2 STATEMENT OF ASSETS AND LIABILITIES ............................................................................................................ 40 12.3 STATEMENT OF CONSOLIDATED REVENUE FUND ............................................................................................. 41 12.4 STATEMENT OF CAPITAL DEVELOPMENT FUND ................................................................................................ 42 12.5 STATEMENT OF CASH FLOWS ......................................................................................................................... 43 12.6 NOTES TO THE ACCOUNT .............................................................................................................................. 44 13 USE OF PROCEEDS ........................................................................................................................................ 57 13.1 OVERVIEW ................................................................................................................................................... 57 13.2 PROJECT DESCRIPTION ................................................................................................................................. 57 14 OTHER GENERAL INFORMATION ................................................................................................................. 59 14.1 STATEMENT OF INDEBTEDNESS ........................................................................................................................ 59 14.2 STATEMENT OF CLAIMS , LITIGATIONS AND DISPUTES ........................................................................................ 59 14.3 COSTS & EXPENSES ...................................................................................................................................... 59 14.4 RELATIONSHIP BETWEEN THE STATE & ADVISERS ............................................................................................... 59 14.5 OFFICIAL LISTING ON STOCK EXCHANGES ..................................................................................................... 59 14.6 CLEARING SYSTEM ....................................................................................................................................... 59 14.7 EXTRACT FROM THE BOND LAW ..................................................................................................................... 60 14.8 EXTRACTS FROM THE TRUST DEED ................................................................................................................... 62 14.9 EXTRACT OF THE RATING REPORT FOR THE ISSUER & ISSUE ................................................................................ 63 14.10 CONSENTS ................................................................................................................................................... 65 14.11 DOCUMENTS AVAILABLE FOR INSPECTION ..................................................................................................... 66 14.12 SINKING FUND SCHEDULE ............................................................................................................................. 66 14.13 BOND AMORTIZATION SCHEDULE .................................................................................................................. 68 15 PROCEDURE FOR APPLICATION AND ALLOTMENT .................................................................................... 69 Benue State Government Bond Prospectus 2 1. ABRIDGED TIMETABLE 1 Abridged Timetable Date Activity Responsibility Receive SEC approval of Prospectus and clearance for Signing 16-Feb-15 Issuing Houses Ceremony 27-Feb-15 Hold /Signing Ceremony Issuing Houses / BESG 27-Feb-15 Application List Open and Closes All Parties 02-Mar-15 Disburse underwritten Amount to BESG Issuing Houses 02-Mar-15 File Executed documents with SEC Issuing Houses File Allotment Proposal and draft newspaper announcement to 02-Mar-15 Receiving Bank SEC 9-Mar-15 Receive SEC clearance of Allotment Proposal Issuing Houses Publish Allotment Announcement in at least two (2) national 12-Mar-15 Stockbrokers dailies 16-Mar-15 Distribute Certificates/Credit CSCS Accounts Registrars 16-Mar-15 Forward Declaration of Compliance to The Exchange Registrars 30-Mar-15 Listing of the Bonds Stockbrokers Post Offer Compliance/Submission of Summary report to the 6-Apr-15 Issuing Houses SEC Benue State Government Bond Prospectus 3 2. DEFINITION OF TERMS AND ABBREVIATIONS 2 Definition of Terms and Abbreviations “AGF” The Accountant General of the Federation or any public officer for the time being in charge of the Federation Account in accordance with the Constitution of the Federal Republic of Nigeria “Allotment Date” Date on which the allotment of the Bonds is approved/cleared by the SEC “Auditor” The Auditor General of Benue State Government of Nigeria “BESG” Benue State Government of Nigeria and the Issuer of the Bonds “Bidder”