Map of Edo State
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THIS DOCUMENT IS IMPORTANT AND YOU ARE ADVISED TO CAREFULLY READ AND UNDERSTAND ITS CONTENTS. IF YOU ARE IN DOUBT ABOUT ITS CONTENTS OR THE ACTION TO TAKE, PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, BANKER OR AN INDEPENDENT INVESTMENT ADVISER. THIS PROSPECTUS HAS BEEN SEEN AND APPROVED BY THE MEMBERS OF THE EDO STATE EXECUTIVE COUNCIL AND THEY JOINTLY AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY FOR THE ACCURACY OF ALL INFORMATION GIVENTHIS DOCUMENTAND CONFIRM IS IMPORTANT THAT, AFTERAND YOU HAVING ARE ADVISED MADE TO INQUIRIES CAREFULLY WHICHREAD AND ARE UNDERSTAND REASONABLE ITS IN THE CIRCUMSTANCES ANDCONTENTS. TO THE IFBEST YOU OF ARE THEIR IN DOUBT KNOWLEDGE ABOUT ITS AND CONTENTS BELIEF, OR THERE THE ACTIONARE NO TO OTHER TAKE, FACTS, PLEASE THE CONSULT OMISSION YOUR OF WHICH WOULD MAKE ANY STOCKBROKER,STATEMENT HEREIN SOLICITOR, MISLEADING. BANKER OR AN INDEPENDENT INVESTMENT ADVISER. THIS PROSPECTUS HAS BEEN For information concerningSEEN certainAND APPROVED risk factors BY which THE shouldMEMBERS be considered OF THE EDO by STATEprospective EXECUTIVE investors, COUNCIL see risk AND factors THEY on pageJOINTLY 77. AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY FOR THE ACCURACY OF ALL INFORMATION GIVEN AND CONFIRM THAT, AFTER HAVING MADE INQUIRIES WHICH ARE REASONABLE IN THE CIRCUMSTANCES AND TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING. For information concerning certain risk factors which should be considered by prospective investors, see risk factors on page 77. THE EDO STATE GOVERNMENT OF NIGERIA Offer for Subscription THE EDO STATE GOVERNMENT OF NIGERIA [NXX] BILLION [%] FIXED RATE INFRASTRUCOffer for SubscriptionTURE DEVELOPMENT BOND ISSUE 2010/2017 N25 BILLION 14% FIXED RATE INFRASTRUCTUREIssue Price: [N1, DEVELOPMENT 000] per Unit BOND ISSUE 2010/2017 PayableIssue in Price: Full onN1, Application 000 per Unit OfferPayable Opens: in December Full on Application 31, 2010 Offer Closes: December 3, 2010 Offer Opens: December 31, 2010 Lead IssuingOffer House Closes: and December Lead Book 31, Runner 2010 Lead Issuing House and Lead Book Runner RC 261272 Joint Issuing Houses / Book Runners RC 261272 Joint Issuing Houses / Book Runners A MEMBER OF THE FIRST CI TY GROUP Stanbic IBTC Bank PLC A Member of Standard Bank Group RC 44 6561 RC125097 RC 444999 RC. 672560 THIS OFFER FOR SUBSCRIPTION OF FIXED RATE INFRASTRUCTURE DEVELOPMENT BONDS IS RESTRICTED TO QUALIFIED INSTITUTIONAL INVESTORS AND HIGH NETWORTH INDIVIDUALS AS DEFINED BY RULE 78 (C)(2) OF THE SECURITIES & EXCHANGE COMMISSION (SEC) THIS PROSPECTUS AND THE SECURITIES THAT IT OFFERS HAVE BEEN APPROVED AND REGISTERED BY THE SECURITIES & EXCHANGE COMMISSION. IT IS A CIVIL WRONG AND CRIMINAL OFFENCE UNDER THE INVESTMENTS AND SECURITIES ACT (NO. 29 OF 2007) TO ISSUE A PROSPECTUS WHICH CONTAINS FALSE OR THIS PROSPECTUS MISLEADINGAND THE SECURITIES INFORMATION. THAT THE ITCLEARANCE OFFERS HA ANDVE REGISTRATION BEEN APPROVED OF THIS AND PROSPECTUS REGISTERED AND THE BY SECURITIES THE SECURITIES & EXCHANGE COMMISSION.WHICH IT IT OFFERS IS A CIVIL DOES WRONG NOT RELIEVE AND THE CRIMINAL PARTIES OFFENCE FROM ANY UNDER LIABILITY THE ARISING INVESTMENTS UNDER THE AND ACT SECURITIES FOR FALSE ACT (NO. 29 OF 2007) TO ISSUEAND MISLEADINGA PROSPECTUS STATEMENTS WHICH CONTAINEDCONTAINS HEREIN FALSE OR OR FOR MISLEADING ANY OMISSION INFORMATION. OF A MATERIAL FACT. THE CLEARANCE AND REGISTRATION OF THETHIS REGISTRATION PROSPECTUS OFAND THIS THE PROSPECTUS SECURITIES DOES WH ICHNOT ITIN OFFERSANY WAY DOES WHATSOEVER NOT RELIEVE SUGGEST THE PARTIESTHAT THE FROM ANY LIABILITY ARISING SECURITIESUNDER THE & ACT EXCHANGE FOR FALSE COMMISSION AND MISLEADING ENDORSES STATEMENTS OR RECOMMENDS CONTAINED THE HEREINSECURITIES OR FOROR ASSUMESANY OMISSION OF A MATERIAL FACT.RESPONSIBILITY FOR THE CORRECTNESS OF ANY INFORMATION CONTAINED HEREI STATEMENT MADE OR OPINION OR REPORT EXPRESSED THEREIN. THE REGISTRATION OF THIS PROSPECTUS DOES NOT IN ANY WAY WHATSOEVER SUGGEST THAT THE SECURITIES & EXCHANGE COMMISSION ENDORSES OR RECOMMENDS THE SECURITIES OR ASSUMES RESPONSIBILITY FOR THE CORRECTNESS OF ANY INFORMATION CONTAINED HEREI STATEMENTTHIS MADE PROSPECTUS OR OPINION IS DATED OR REPORT DECEMBER EXPRESSED 31, 2010 THEREIN. THIS PROSPECTUS IS DATED December 31, 2010 TABLE OF CONTENTS ABRIDGED TIMELINE ....................................................................................................................................................................3 DEFINITIONS ................................................................................................................................................................................4 PARTIES TO THE OFFER ................................................................................................................................................................7 DECLARATION BY THE ISSUER ....................................................................................................................................................12 SUMMARY OF THE BONDS.........................................................................................................................................................13 THE ISSUE...................................................................................................................................................................................16 TERMS AND CONDITIONS OF THE BONDS ..................................................................................................................................17 THE EDO STATE EXECUTIVE COUNCIL .........................................................................................................................................21 NIGERIA – AN OVERVIEW...........................................................................................................................................................27 DESCRIPTION OF THE ISSUER .....................................................................................................................................................35 UTILIZATION OF PROCEEDS........................................................................................................................................................40 EXTRACTS FROM THE ISSUE RATING REPORT.............................................................................................................................47 EXTRACTS FROM THE ISSUER RATING REPORT...........................................................................................................................48 FINANCIAL FORECASTS...............................................................................................................................................................50 MEMORANDUM ON THE FINANCIAL PROJECTIONS........................................................................................................................50 ASSUMPTIONS ....................................................................................................................................................................................55 LETTER FROM THE FINANCIAL ADVISERS AND ISSUING HOUSES.......................................................................................................................61 HISTORICAL FINANCIAL INFORMATION – FIVE YEAR FINANCIAL INFORMATION ........................................................................62 REPORTING ACCOUNTANTS REPORT ON HISTORICALS .............................................................................................62 STATEMENT OF ACCOUNTING POLICIES ....................................................................................................................................................63 STATMENT OF CONSOLIDATED REVENUE FUND..........................................................................................................................................65 STATEMENT OF CAPITAL DEVELOPMENT FUND ..........................................................................................................................................66 STATEMENT OF CASH FLOWS .................................................................................................................................................................67 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................................................................................68 RISKS & MITIGATING FACTORS ..................................................................................................................................................77 STATUTORY AND GENERAL INFORMATION................................................................................................................................79 STATEMENT OF INDEBTEDNESS .....................................................................................................................................................79 CLAIMS, LITIGATIONS & DISPUTES................................................................................................................................................79 MATERIAL CONTRACTS .................................................................................................................................................................79 EXTRACT OF THE TRUST DEED......................................................................................................................................................79