Professional Documents
Culture Documents
If you are in any doubt about its content or the action to take, kindly
consult your Stockbroker, Accountant, Banker, Solicitor or any other professional adviser for guidance immediately.“FOR
INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS SEE
“RISK FACTORS” ON PAGE 74-76” .INVESTMENT IN THE BOND IS STRICTLY FOR INSTITUTIONAL INVESTORS.
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 (“the Act”) to issue a Prospectus which contains false or misleading information. The
clearance and registration of this Prospectus and the Securities which it offers does not relieve the parties
from any liability arising under the Act for false and misleading statements contained herein or for any
omission of a material fact.
The registration of this Prospectus does not in any way whatsoever suggest that the Securities and
Exchange Commission endorses or recommends the securities or assumes responsibility for the
correctness of any statement made or opinion or report expressed therein.
NIGERIA OVERVIEW 26
FINANCIAL FORECASTS 49
Statement of Cashflows 67
Statement of Indebtedness 77
Material Contracts 77
Consents 89
RECEIVING AGENT 93
APPLICATION FORM 94
RESPONSIBILITY
DATE* ACTIVITY
ISSUING HOUSES
30/06/10 Application List Opens/Disburse Underwritten Amount to BYSG
ISSUING HOUSES
30/06/10 Application List Closes
Forward Allotment Proposal, Summary Reports and draft newspaper ISSUING HOUSES
02/07/10
announcement to SEC
ISSUING HOUSES
09/07/10 Receive SEC clearance of allotment and registration of the Bonds
16/07/10 Publish Allotment Announcement in at least two(2) national dailies ISSUING HOUSES
ISSUING HOUSES/REGISTRAR
16/07/10 Return excess/rejected application monies (if any)
REGISTRAR
23/07/10 Dispatch Bond Certificates/ Credit CSCS Accounts
STOCKBROKER
26/07/10 Forward Declaration of Compliance to The Exchange
STOCKBROKER
30/07/10 List the Bonds on the Floor of The Exchange/Trading Commences
ISSUING HOUSES
30/07/10 Forward Post Compliance Report to SEC
*These dates are indicative only and subject to change without prior notice.
“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.
“Bondholders” or “Holders” Any person(s) (individual, joint or body corporate) registered in the
register established and maintained for the purpose of this Bond Issue
as a holder of the Bonds.
“Business Day” Monday to Friday excluding any day designated as a public holiday by
the FGN.
“BYSG” or “the State” or “the Bayelsa State Government of Nigeria.
Issuer”
“Capital Assets” Capital Assets Limited.
“CBN” Central Bank of Nigeria.
“CITA” Company Income Tax Act Cap C21, LFN 2004.
“Coupon Payment Date” Semi annually in arrears for every year that the Bond is outstanding i.e
June 30th and December 31st.
“Coupon Rate” 13.75% per annum payable semi-annually in arrears
“CSCS” Central Securities Clearing Systems Limited.
“Dealers” The financial institution(s) appointed by the State from time to time to
exclusively purchase or underwrite and trade in the Bonds.
“FBN Capital” or “Lead FBN Capital Limited.
Issuing House”
“Federation Account” The special account set up under Section 162(1) of the Constitution of
the Federal Republic of Nigeria, 1999 into which is paid all revenues
collected by the FGN to be distributed among the Federal, States and
the Local Government Councils in each State, on such terms and in
such manner as may be prescribed by the National Assembly.
“FGN” Federal Government of Nigeria.
“GDP” Gross Domestic Product.
“IGR” Internally Generated Revenue.
“ISA”“ Investment & Securities Act, No. 29, 2007.
“ISPO” The Irrevocable Standing Payment Order dated February 15, 2010 and
issued by the State’s Accountant-General to the Accountant-General of
the Federation for the periodic deduction of monies from the State’s
statutory allocation from the Federation Account and payment thereof
into a Sinking Fund held by the Trustees by way of security for the
Bonds.
“Issuing Houses” FBN Capital, BGL, Capital Asset, Skye Financial Services, Sterling Capital,
Stanbic IBTC, UBA Capital and Vetiva Capital.
“Joint Issuing Houses” or “JIH” BGL Plc, Capital Asset Limited, Skye Financial Services Limited, Stanbic
IBTC Plc, Sterling Capital Markets Limited, UBA Capital Limited and
Vetiva Capital Management Limited.
“LFN” Laws of the Federation of Nigeria.
G.Elias & Co
NCR Building (6th Floor)
6 Broad Street
Lagos State
Units of Sale: Minimum of 1,000 units and multiples of 100 units thereafter
Tenor: 7 years
Coupon Payment: Semi annually in arrears for every year that the Bond is outstanding i.e June 30th and December
31st. Initial coupon shall be paid on June 30th or December 31st which ever date comes first
from the date the issuer receives the underwriting commitment.
Coupon Commencement Coupon on Bond will accrue from the date the underwriters pay the firm underwriting
Date: commitment to the Issuer.
Business day Convention: Modified Following: Where a Coupon Payment Date falls on a non-Business Day, such payment
shall be postponed to the next day which is a Business Day provided that if such a Business
Day falls into the next calendar month, such Coupon Payment Date shall be brought forward to
the immediately preceding Business Day.
Day Count Fraction: Actual/Actual: Coupon will be calculated on the basis of the actual number of days (365 or
366) in each year.
Issuer Rating: Bb- (Rating by Agusto & Co.) May 2010
Security: Security for the repayment of principal and coupon in relation to the Bond shall be
held by the Trustee and shall be the ISPO issued to the Office of the Accountant
General of the Federation as a first line charge upon and payable out of the Statutory
Allocation of the State. Deductions from the State’s Statutory Allocation shall be
made in an amount equal to the principal and interest payable by the Issuer in
respect of the Bonds into a Sinking Fund held by the Trustee as set out in the Trust
Deed.
Construction of Gateway
from East-West Link Road
2 to Yenagoa 6,041,000,000 5,041,000,000 1,000,000,000 83% *9 months
31 Mw & 3 X 20 Mw Imiringi
87% * 9 months
4 and Etelebou Gas turbines 14,501,668,537 12,670,156,014 1,831,512,523
Construction of Yenagoa
5 Galleria 5,472,989,917 2,227,161,010 3,245,828,907 41% June 2011
Construction of 3 Senatorial August
6 Secondary Schools 6,012,011,803 1,382,762,714 4,629,249,089 23% 2010
Sinking Fund: A Sinking Fund has been created in accordance with the provisions of the Bond Law
and the ISA. This Sinking Fund shall be funded from the Statutory Allocation by way
of the ISPO and shall be jointly administered by the Trustees.
Quotation: An application has been filed with the Council of the Exchange for the admission of
the Bonds to the Daily Official List of the Exchange.
Tax Qualification: All payments made to Bondholders shall be free and clear of Withholding, State and
Federal income and Capital Gains Taxes with no deduction made whatsoever at
source.
Pursuant to the forgoing, the Joint Solicitors to the Offer are of the opinion that the
liability that may accrue to the State from the cases reviewed by them would not
have any material adverse effect on the Offer.
The members of the State’s Executive Council are of the opinion that the
aforementioned cases are not likely to have any material adverse effect on the state
and or the Offer.
Status: • The Bonds qualify as securities in which Pension Fund Administrators may
invest under the Pension Reform Act, Cap P4, LFN 2004; and
• The Bonds qualify as securities in which Trustees may invest under the
Trustee Investment Act Cap T22 LFN 2004 subject to the listing of the
Bonds on the Nigerian Stock Exchange.
Qualified Investors: This Offer is restricted to Qualified Institutional Investors and High Net-worth
Individuals as defined by the SEC Rules and Regulation 78(c)(2).
Governing Law The Laws of the Federal Republic of Nigeria
A copy of this Prospectus and the documents specified herein has been delivered to the Securities & Exchange Commission for clearance
and registration.
This Prospectus is being issued in compliance with the provisions of the Investments and Securities Act No. 29, 2007, the Rules and
Regulations of the Commission and the Listing Requirements of The Exchange and contains particulars that are in compliance with the
requirements of the Commission and The Exchange, for the purpose of giving information to the public with regard to the
₦50,000,000,000 13.75% Fixed Rate Development Bond Issue due 2017 by the Issuing Houses specified herein on behalf of the Bayelsa
State Government of Nigeria.
The Issue Price is 100% of the Par Value of the Bonds. The Coupon on the Bonds will be payable semi-annually in arrears in equal
instalments at the rate of 13.75% per annum six months from the date of allocation of the bond in each year till the Maturity Date of the
Bonds. Payments of Principal of, and Coupon on, the Bonds will be made without withholding or deductions for, or on account of any
State and Federal income and capital gains taxes in the Federal Republic of Nigeria. An application has been made to the Council of The
Exchange for the admission of the Bonds to the Daily Official List (Bonds) of The Exchange.
The Bayelsa State Executive Council collectively and individually accepts full responsibility for the accuracy of the information contained
in this Prospectus and have taken reasonable care to ensure that the facts contained herein are true and accurate in all respects and
confirm, having made all reasonable enquiries that to the best of their knowledge and belief, there are no other material facts the
omission of which would make any statement herein misleading or untrue.
On Behalf of
N50 Billion 13.75% Fixed Rate 7year Bond Issue By Bayelsa State Government
Issue Price: N1,000 per unit
1. Amount of Bonds
The Aggregate principal amount of Bonds issued pursuant hereto is N 50,000,000,000 (Fifty
Billion Naira) comprising 50,000,000 registered Bonds at N 1,000 (One Thousand Naira) per unit.
2. Type of Bonds
Fixed Rate Bonds.
3. Status of Bonds
The Bonds constitute senior and direct obligations of the State. The Bonds are not guaranteed by
the Federal Government of Nigeria. The Bonds qualify as securities in which trustees and pension
fund administrators may invest under the Trustees Investment Act Cap. T22 LFN 2004 and the
Pension Reform Act Cap P4 LFN 2004 respectively. The Bonds are also acceptable pledging
collateral for accessing CBN Expanded Discount Window obligations. The Bonds qualify as
“Government Securities” within the meaning of CITA and PITA, for purposes of tax exemption.
4. Minimum Subscription
The minimum subscription amount for the Bonds is 1,000units or N1,000,000.00 and multiples
of 100 units or N100,000.00 thereafter.
5. Tax Considerations
The Bonds shall be exempt from all forms of taxation in the Federal Republic of Nigeria.
Accordingly, all payments made to Bondholders shall be free and clear of withholding, or any
deductions at source or otherwise and/or State and Federal income and capital gains or other
taxes.
6. Tenor
(Seven) 7 years
8. Payments
Interest and principal payments in a specified currency will be made by credit to the bank account
of the Bondholder as specified on the applicable application form. No additional Interest will be
paid on any amounts withheld. The Bondholder shall be the only person entitled to receive
payments in respect of the Bonds and the Issuer will be discharged by payment to, or to the order
of, the Bondholder in respect of each amount so paid.
9. Coupon Payment
(i) The Coupon shall be payable semi-annually in arrears in equal payments on each Coupon
Payment Date up to and including the Maturity Date.
(ii) Initial coupon shall be paid on June 30th or December 31st which ever date comes first
from the date the issuer receives the underwriting commitment.
(iii) The Coupon rate payable on the Bonds shall be 13.75% fixed rate per annum (“Coupon
Rate”).
(iv) The Trustees shall apply the monies in the Sinking Fund Account for Coupon Payments to
the Bondholders on the Coupon Payment Dates.
(a) lodge the Bonds for transfer at the specified office of the Registrars and
(b) complete and deposit the instrument of transfer in respect thereof duly
executed by the holder or holders thereof or its or their attorney or attorneys
duly authorised in writing at the specified office of the Registrars and upon
payment of the prescribed fee (if any).
The Registrars, being satisfied with the documents of title and identity of the person
making the request, shall effect the transfer and post a written notice of receipt of an
application of transfer to the registered holder in whose name the application is made.
(vi) Each Bond issued shall be registered on the Register. Any transfer of Bonds shall be
effective only to the extent that such transfer is registered in the Register, by the Holder
or transferee thereof in person or by his attorney duly authorised in writing, upon
presentation and surrender of the Bond Certificate together with a written instrument of
transfer in a form satisfactory to the Registrar and in compliance with the Law duly
executed by or on behalf of the registered Holder and the transferee by a duly authorised
attorney. Upon surrender of the aforesaid documents to facilitate the registration of
transfer of any Bond, the Registrar shall if the above stated conditions are met, register
such transfer, and deliver a new Bond Certificate(s) to the transferee as appropriate.
(vii) In case of the death of a registered Bondholder, the survivors or survivor where the
deceased was a joint holder, and the executors or administrators, of the deceased where
he was a sole or only surviving holder, shall be the only persons recognised by the State
as having any title to such Bond.
(viii) Any person becoming entitled to the Bond in consequence of the death, bankruptcy,
winding-up or dissolution of the holder thereof may, upon producing such evidence that
he sustains the character in respect of which he proposes to act under this condition or of
his title as the State or the Registrars shall think sufficient, be regarded himself as the
holder of such Bond, or subject to the preceding conditions as to transfer may transfer
the same. The State shall be at liberty to retain the interest payable upon any Bond which
any person entitled to transfer under the preceding condition until such person shall be
registered or duly transfer the same as aforesaid.
13. Notices
(i) Any notice, request, requirement, stipulation or other document or matter to be given,
issued or made under this Deed shall be in writing and shall be signed by the person
giving, issuing or making it or that person's authorised agent or representative and shall
be served in accordance with Paragraph 14 (ii) below.
(ii) Any notice or other document referred to in Paragraph 14 (i) above, shall be served by
personally delivering the same by hand to the registered office or to the address of the
person to be served as specified in this Deed or previously notified for this purpose, or by
sending the same by a reputable courier service to such address or by dispatching the
same by legible facsimile transmission or other means of communication in permanent
written form, and due service shall be deemed to have been made at the time of actual
receipt, save that in the case of any facsimile transmission sent after 4.30 pm, it shall be
deemed to have been served at 9.00 am on the next Business Day.
The State has an Executive Council, which comprises the State Governor, the Commissioners, Secretary to
the State Government, Head of Service and such other government officials as are invited into the
Executive Council by the Governor.
The profiles of the members of the State Executive Council are provided thus:
Sylva joined the Peoples Democratic Party (PDP) at the inception of the Fourth Republic in 1999. He was
appointed Political Adviser to then Governor of Bayelsa State, Chief Diepreye Alamieyeseigha, and then
Special Assistant to former Minister of State for Petroleum Resources, Dr. Edmund Daukoru, after
resigning as aide to the former governor in 2002. Chief Sylva was also a member of the Governing Council
of Federal University of Agriculture, Umudike, Abia State, until 2004.
Chief Timipre Sylva won the gubernatorial election and succeeded Goodluck Jonathan on May 29, 2007.
Although an Appeal Court judgement annulled the election in April 2008, Chief Slyva in demonstration of
his popularity among his people won the governorship rerun election that was ordered by the court, and
was sworn-in as Governor of Bayelsa State on May 27, 2008. In the spate of two years, the Government of
Timipre Sylva created the Bayelsa State Infrastructural Development Agenda and completed some of the
projects under the first phase of the programme. The projects include Gloryland Castle which is a new
government lodge, a new gas turbine, and the Peace Park, among others. The second phase of this
development agenda includes: the development of agriculture, especially rice production which will be for
export and local consumption and oil palm development in collaboration with foreign organizations and
agencies.
Civil Service as an Assistant Executive Office (Audit) in 1984. He was promoted to the post of
Administrative/Personnel Office in 1986 from where he was appointed the Secretary, Rivers State Projects
Monitoring & Implementation Committee, Port Harcourt in 1993. He became the head of the team that
supervised the Special Projects – Schools in renovation in Ogoni land in 1995.
On the creation of Bayelsa State, Mr. Oworibo was employed as the Pioneer Principal Secretary,
Government House Yenagoa in 1996 and Head of Personnel Department, Governor’s Office, Yenagoa in
July 1998. He was appointed Chairman Caretaker Committee, Ogbia Local Government in April 1998 and
Permanent Secretary, Bayelsa State Civil Service with effect from October 1998. He was then moved to the
Office of the Head of Service as the Permanent Secretary from 1999-2004. He was transferred to the
Office of the Secretary to the State Government as the Permanent Secretary (General Services) and was
appointed Head of Service on December 28, 2009
Anthony George-Ikoli (SAN) – Honourable Commissioner for Justice & Attorney General
Mr. George-Ikoli (SAN) holds a Bachelor of Law degree from the University of Ife (now Obafemi Awolowo
University, Ile-Ife) (1980) and was called to the Nigerian Bar in 1981. He started his career as an Associate
Counsel, Commercial Litigation at Bentley, Edu, Adelakun & Co from 1982-1987. He later became a
Partner in charge of Litigation from 1987-1996 in Bentley Edu (in association with Irving & Bonnar Legal
Practitioners). Prior to his appointment as the Attorney General & Commissioner for Justice Bayelsa State
in July 2007, he was the Senior Partner, George Ikoli & Okagbue, Legal Practitioners, Notaries Public from
July 1996-June 2007.
Language at various levels and schools from 1980 to 2002, before she resigned into private business. A
High Chief of Kobowei Clan and Justice of the Peace, Josephine Ezonbodor is a member of Agbere Council
of Chiefs. She is also a member of several women associations and holds several leadership positions.
Dudafa Waripamo-Owei – Honourable Commissioner for Local Government & Rural Development
Mr. Dudafa graduated with a Bachelor of Education degree in Accounting from the Rivers State College of
Education (2000) and MBA Accountancy from Rivers State University of Science & Technology (2006). He
served as the Protocol Officer, Government House, Bayelsa State from 2001 to 2002, Member, Bayelsa
State House of Assembly from 2003 to 2007, Special Adviser to the Executive Governor of Bayelsa State
on Youth Mobilisation and Empowerment from 2007 to 2008 and was appointed as Commissioner for
Local Government & Rural Development in 2008.
Etifa Bekeakpo– Honourable Commissioner for Youth, Conflict Resolution & Employment Generation
Mr. Etifa obtained a Bachelor of Arts (BA.) degree in Philosophy from the University of Port Harcourt, Rivers
State in 1995. He served with the Federal Character Commission in Abuja from 1999 to 2001, and was the
Chief Executive Officer of Afagoz Nigeria Limited from 2003 to 2006. He was appointed the Special
Adviser to the Governor of Bayelsa State on General Duties from Feb 2006 to May 2007 and Commissioner
of Commerce & Industry for Bayelsa State from July 2007 to May 2008. He was subsequently redeployed
to the Ministry for Youth, Conflict Resolution & Empowerment in June 2008.
Oru, Ebapregha Dora (Miss) – Honourable Commissioner for Gender and Social Development
Hon. Ebapregha Dora Oru, a devout Christian, was born November 26th 1968 at Egbemor-Angalabiri in
Ekeremor Local Government Area of Bayelsa State. She attended the Rivers State College of Education
where she obtained National Certificate in Education (N.C.E) in 1995.
She also holds a B.Sc. Degree in Adult Education and Community Development from the Rivers State
University of Science and Technology, Port Harcourt in 2005. Her working experience includes Facilitator
with the Niger Delta Environmental Surveys, Cashier with the Community Development Bank, Egbemor-
Angalabiri, Administrative Officer with the Local Government Service Commission and Head of the Health
Department in the Local Government Area. Her interest in grassroots politics started in 1999 when she
became a Councilor representing her ward in Ekerernor Local Government Area. Hon. Ebapregha Oru rose
to the position of Acting Local Government Chairman in 2002 when the then Government of Chief DSP
Alamieyeseigha created 24 Development Centres.
John D. Iyekoroghe - Honourable Commissioner for Special Duties (Central Senatorial District)
Mr. Iyekoroghe was born 25th October 1960, in Apoi, Southern Ijaw Local Government Area. He was
educated at State Primary School Apoi, Teachers Training College, Rumuokuta and the University of Port
Harcourt where he obtained a Bachelor of Education degree in 1995. He was the Zonal Treasurer for the
Nigerian Union of Teachers (1995-1997) and Political Secretary Apoi/Olodiama Local Government Area
(L.G.A.) in 2001. He was appointed as a Special Adviser to the Executive Chairman, Southern Ijaw L.G.A. on
petroleum, environment and pollution matters in 2002 and Chief Educational Officer Ministry of Education
zonal office Oporoma in 2003. Prior to his appointment as a Commissioner in Bayelsa, he was appointed
as the Supervisor for Lands and Housing Southern Ijaw L.G.A. in 2005.
Bennet Owei–Zala - Honourable Commissioner for Special Duties (East Senatorial District)
Chief Owei was born 16th November 1953 in Sangana, Brass Local Government Area of Bayelsa State. He
was educated at Dennis Memorial Grammar School, Onitsha (1964-1966), Kings College Lagos (1967-
1970), Ahmadu Bello University of Zaria (1972-1975) where he obtained a B.Sc. Degree in Biochemistry.
He served as principal, Government Secondary School, Akassa (1976-1979); Board member, Delta Hotel
Limited, Port Harcourt (1980-1983); Community Engagement Representative, Chevron (Nig) Limited Warri,
(1998-2003); Adviser Policy, Government and Public Affairs (East) Chevron (Nig) Limited Port Harcourt.
(2006-2007). Prior to his present appointment he served as Commissioner for Local Government and
Rural Development (2007-May 2008).
Stephen B. Ogullah – Honourable Commissioner for Special Duties (West Senatorial District)
Mr. Ogullah obtained Diploma in Computer Science from Academy of Computer Education and Technology
(Affiliated to IDPM London) Ibadan in 1992, Police Certificate from the Police Training School, Ikeja in
1995, Diploma, Business Administration from Delta State University, Abraka in 1999 and Higher Diploma,
Business Management Technology from Federal University of Technology (FUTO) Owerri in 2004. He was
employed at the University of Ibadan, Security Department from 1989 to 1994 and Nigerian Security
Printing & Minting Company Limited from 1995 to 2002. He was appointed as a member of the Light
Committee Sagbama Local Government Council from 2004 to 2005 and subsequently appointed as
Executive Assistant to the Chairman Sagbama Local government Council from 2006 to 2007. He was
appointed as the Honourable Commissioner for Special Duties (West) in July 2007.
Introduction
The Federal Republic of Nigeria is located in West Africa and shares land borders with the Republic of
Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast lies on the Gulf of
Guinea, a part of the Atlantic Ocean, in the south. It consists of thirty-six States and the Federal Capital
Territory. Nigeria operates a federal system of government comprised of three tiers, namely the federal
government, state governments, and local governments. At both federal and state levels, there is
separation of powers amongst the executive, legislative and judicial arms of government.
In 1999 Nigeria returned to democratic rule with the election of Chief Olusegun Obasanjo who served two
terms of for (4) years each as the President of the Federal Republic of Nigeria. He was succeeded in April
2007 by Alhaji Umaru Yar’Adua thus making it the first successful transition from one civilian government
to another in Nigeria’s 49 year history.
The administration promised to tackle the major problems affecting Nigeria as included in a 7 – point
agenda, which include focus on the following sectors:
• Power and Energy;
• Food Security and Agriculture;
• Wealth Creation and Employment;
• Transport;
• Land Reform;
• Security; and
• Education.
The FGN renewed its emphasis on the rule of law and embarked on a rebranding exercise called “Good
People Great Nation”, which is expected to lead to significant improvement in Nigeria’s perception by the
rest of the world.
The conflict in the Niger Delta region escalated in May 2009 following an offensive attack by the FGN. The
unrest in the Niger Delta region depressed oil production consequently, oil revenues which accounts for a
significant proportion of Nigeria’s revenue. The conflict eased shortly after the offer of the amnesty by the
President in June 2009 which was accompanied by the release of the leader of one of the key militia
groups, the Movement for the Emancipation of the Niger Delta People (MEND). In October 2009, the
amnesty offer was accepted by the militants which has since resulted in a more stable economic and
political environment.
On May 6, 2010, Dr. Goodluck Ebele Jonathan who ran as the vice president alongside President Umaru
Yar’Adua in April 2007 was sworn in as the President of the Federal republic of Nigeria following the
sudden demise of the President Yar’Adua.
President Goodluck Jonathan has committed to the actualisation of his predecessors 7-point agenda with
particular emphasis on power & energy, electoral reform, Niger Delta amnesty programme to ensure
continued peace in the region, encourage improved production output and attract foreign investment.
External Debt
Nigeria’s external debt stock rose from $3,397.48 million in September 2007 to $3,720.36 million in
December 2008, representing a 9.5% increase year on year according to the Debt Management Office
(DMO). The nation’s total external debt stock as at September 2009 stood at $3,863.92 million which
represents an increase of 3.86% over 2008 figure and 13.73% over 2007 external debt stock. Debt owed
multilateral organizations (World Bank Group and the African Development Bank Group) accounted for
83.96% of total external debt stock in September 2007 and 85.28% of external debts in December 2008.
Loans for Health and Social welfare, Agriculture and water supply projects accounted for the largest
fractions in the external debt stock as at September 2009, taking 16.65%, 14.50% and 10.56%
respectively. The steady increase in total external debts from 2007-2009 was due to increased spending
on infrastructure development, increased budgetary allocations and drop in revenue accruable to the
government as a result of the global economic crisis. The revenue decline was due to the steep dip in the
price of crude oil-Nigeria’s main source of foreign exchange earnings to under $40 per barrel in mid
2008. Sub-national debt (State and local Governments external debt stock) also edged up 1.81% to
$3,720.36 million in December 2008 from $3,654.21 million in December 2007. Following the Paris Club
debt relief in 2006, Nigeria is among the countries with the lowest debt to GDP ratio in the world.
Domestic Debt
Nigeria’s domestic debt trend mirrored that of its external debt according to the DMO. The nation’s total
domestic debts rose 6.94% to $2,320.31million in December 2008 from $2,169.63 million in December
2007. Domestic debt stock was $3,058.19 million in September 2009, representing an increase of 31.80%
and 40.95% over 2008 and 2007 total domestic debt stock respectively. The Federal Government’s
principal source of raising domestic capital between 2003 and 2006 was treasury bills. However, we have
witnessed a shift to the issuance of Federal Government Bonds which now account for approximately
60.46% of the domestic debt stocks. The rise in the nation’s domestic debt stock was as a result of the
need for the government to provide longterm funding for its planned infrastructure developments and
budgetary allocations.
Monetary Policy
In line with the CBN Amendment Act, 2007, one of the principal functions of the Central Bank of Nigeria is
to “ensure monetary policy and price stability”. In order to facilitate the attainment of the objective of
price stability and to support the economic policy of the Federal Government, the Act provides for the
constitution of a twelve (12) man Monetary Policy Committee (MPC) with the Governor of the CBN as the
Chairman. The CBN recognizes that achieving stable prices would require continuous assessment and
evaluation of its monetary policy implementation framework to enable it respond to the ever-changing
economic and financial environment. Based on the foregoing, the CBN introduced a new monetary policy
framework that took effect on 11th December, 2006 with the “Monetary Policy Rate” (MPR) as the
Operating Target rate. The ultimate goal of this new framework is to achieve a stable value of the
domestic currency through stability in short-term interest rates around which serves as an indicative rate
for transaction in the inter-bank money market as well as other Deposit Money Banks' (DMBs) interest
rate.
A key priority of the CBN is to reduce interest rate over time and sustain the lower rate such that it
provides access to lower cost of funds for the development of the real sector. In line with this objective,
the MPR was reduced in September 2008, to 9.75% from 10.25%. Further reductions in the MPR were
witnessed in April and July 2009 to 8% and 6% respectively. Despite the spread which the CBN has
imposed around lending rate, it has not achieved the desired result of keeping lending rates low as
lending rates are still above the spreads stipulated by the CBN. (Source: Central Bank of Nigeria)
Fiscal Policy
In recent times, Nigeria’s approach to the formulation of fiscal policies with respect to its expenditure has
been to benchmark its budget below the expected price of crude oil in the international market as the
revenue from oil contributes about 95% of the country’s earnings. The 2010 budget is based on a
benchmark of US$53 per barrel of crude oil despite the current price which averages US$75 per barrel.
This oil-price-based fiscal rule has ensured that the economy stays focused on the improvement of
budget execution and enhancement of public financial management.
The office of the President on November 24, 2009 issued a budget proposal to the Senate and House of
Representatives which was characterized by supportive fiscal measures to accelerate economic recovery
following the recent global recession and liquidity squeeze. This budget proposed an allocation of N1.37
trillion and N2.10 trillion for capital projects and recurrent expenditure respectively in 2010. These
represented an increase of 72% and 48.9% from N796.74 billion and N1.41 trillion in 2009 respectively.
However, the implementation of this budget following approval from the legislative arm will determine if
the desired effect of stimulating the economy is achieved.
Agriculture
In the first quarter of 2010, like other years, the major agricultural activities in the Northern part of the
country are mainly harvesting of guinea corn and dry season crops while in the southern part of the
country, preparation for the planting season starts. Expectedly, pre-planting activities dominate the
farming activities during this period as the rainfall level is low across the country.
With land preparation dominating the activities by farmers during this period, agricultural output is
expected to be low, except for dry season crops. In terms of agricultural output, the real GDP growth in
the first quarter of 2010 stood at 5.48% as against 5.46% in the corresponding period of 2009. The slight
increase in growth recorded by the sector in the first quarter of 2010 could be attributed to the late
harvest of crops in some parts of the country during the first two months of the year. However, activities
in this sector was constrained by the recent drop in the prices of agricultural commodities following the
global economic melt-down as reflected in the Consumer Price Indices, published by the National Bureau
of Statistics, which indicated that the average year-on-year change in food inflation in the first quarter of
2010 was 13.8% as against 18.2% recorded in 2009. (Source: National Bureau of Statistics)
According to the National Bureau of Statistics, on an aggregate basis, the economy when measured by the
Real Gross Domestic Product (GDP) grew by 7.23% in the first quarter of 2010 as against 4.50% in the
corresponding quarter of the previous year as shown in the GDP Growth in % chart below. The 2.73% point
increase in Real GDP growth observed in the
first quarter of 2010 was accounted for by the
increase in production in the oil sector of the
economy. The nominal GDP for the first
quarter of 2010 was estimated at
₦6,399,716.09 million as against the
₦5,404,850.00 million during the
corresponding quarter of 2009, thus,
indicating an increase of ₦994,866.09
million. The economy, which can be broken
into two broad output groups, that is, Oil and
Non-oil sectors, had the Oil sector witnessing
increased output in the first quarter of 2010.
The oil sector plays a pivotal role in the
Nigerian economy as a dominant source of
revenue to the government. (Source: National Bureau of Statistics)
Solid Minerals
Prior to the emergence of the petroleum industry, solid minerals exploration was one of the key sectors of
Nigeria’s economy. Until the 1960s, coal and tin were mined in places like Enugu and Jos and exported on
a large scale but poor management by state-owned enterprises led to a decline in existing operations.
Nigeria is one of the countries with the highest concentration of varieties of solid minerals in Africa. The
solid minerals sector is among the vital sectors that hold the key to the successful implementation of the
Government’s efforts at diversifying the economy for sustainable development. It is expected that 34 solid
minerals of abundant commercial quantities will soon be subject to bidding rounds for prospecting and
exploration.
However, the contribution made by the sector to total GDP over the years has not been impressive
compared to other sectors of the economy as solid minerals contributed 0.32% and 0.28% respectively in
the 1st and 2nd quarter of 2009.
Since the beginning of 2009, crude price behaviour has alternated between periods of sharp upward
movements followed by large corrections. The price of OPEC reference basket attained a high of
US$72.92/b and a low of US$38.14/b in 9 months, 2009. Crude oil price movement in September 2009
shows some positive movement following the global outlook. The average price of the OPEC oil reference
basket in September was US$67.17/b higher than the average year-to-date of US$57.15/b. The Nigerian
National Petroleum Corporation (NNPC) stated on November 30, 2009 that the nation’s crude oil
production capacity has recorded a quantum leap in the aftermath of the amnesty programme and the
return of peace in the Niger Delta area. It is expected that the positive outlook of the world economy and
its position on oil demand should help the oil price to sustain the current level or achieve a further
increase. The combination of increase in the oil price and improvement in crude oil production is
expected to improve the earning capacity of Nigeria and also bolster foreign exchange earnings.
The Oil & Gas Journal estimates that Nigeria had an estimated 185 trillion cubic feet (Tcf) of proven
Natural Gas reserves as at January 2006, which makes Nigeria the seventh largest natural gas reserve
holder in the world and the largest in Africa. The vast majority of natural gas found in Nigeria is
associated, meaning that it occurs in Crude Oil reserves as free gas. Because many of the fields lack the
infrastructure to produce the associated natural gas, it is flared. Nigeria is one of the biggest gas flaring
Nations in the world with 43 percent of its total annual natural gas production being flared. This
prompted the Nigerian Senate to set a new deadline for oil companies to end gas flaring by December 13,
2010.
The Nigerian Government introduced the Gas Master Plan for the management of natural gas in 2008. The
objective of the Gas Master Plan includes facilitating greater use of Liquefied Petroleum Gas (LPG), ensure
the availability of gas to fuel the various power generating plants and promoting the West African gas
pipeline project which entails the construction of a 600km pipeline to supply Nigerian associated gas to
neighbouring Republic of Benin, Togo and Ghana. The gas master plan places emphasis on domestic
market as opposed to exports and to ensure the success of the initiative, the Federal Government gave
the oil companies a directive to make available to the domestic market at least 50 per cent of their total
gas production.
Manufacturing
During the first quarter of 2010, manufacturing activities decreased relative to the same period in 2009. It
recorded a decline in growth rate from 7.03% in 2009 to 6.43% in 2010. The development is traceable to
the low manufacturing activities usually recorded in the first quarter after the festivities in the last quarter
of the previous year, poor electric power supply, and inability to access credit from banks arising from the
credit crisis in the banking sector. Cement production and other manufacturing activities were the major
drivers of growth in this sector. (Source: National Bureau of Statistics)
There are positive signs that activities in the manufacturing sector will experience further improvement as
the Federal Government of Nigeria is keen on improving power supply by achieving the 6,000 megawatt
power generation target of December 2009 it failed to meet as President Goodluck Jonathan has assumed
the leadership role in the Federal Ministry of Power.
Financial Institutions
The Financial Institution sub-sector comprises banking and insurance firms. The need for adequate
liquidity in the sector to ensure that the banks meet up with their credit obligations to the other sectors
for economic growth was constrained by the distortions that the banking sector experienced in 2008-09.
This continued into the first quarter of 2010 especially the recent banking sector reforms initiated by the
CBN to recover non-performing and bad loans from banks’ customers.
The reform by the Central Bank of Nigeria has increased banks’ risk averseness as the CBN has insisted on
professionalism, reduction of operational abuses and waste in banking business. This has therefore
drastically reduced the banks’ interest in lending activities as they are faced with task of recovering
existing bad and non-performing loans. The sector recorded a growth of 4.07% in the first quarter of
2010 compared with the 4.21% recorded in same period of 2009. (Source: National Bureau of Statistics)
Telecommunications
This sector continued to perform impressively and has remained one of the major drivers of growth in the
Nigerian economy. Following intensive marketing strategies and value added services by
telecommunication companies in Nigeria, the sector recorded a real GDP growth of 1032.54% in the first
quarter of 2010 compared with 31.75% recorded in the corresponding period of 2009.
According to the Nigerian Communications Commission (NCC), Nigeria, in the third quarter of 2009
overtook South Africa as the continent’s biggest mobile market with more than 62 million subscribers.
The Nigerian telecoms market as a whole generated $8.4 billion in service revenue by the end of 2008, up
23% year-on-year as reported by industry research group Pyramid Research. As at April 2010, the NCC
report stated that active subscribers for mobile CDMA, mobile GSM, and fixed wired/wireless were
78,854,603. It also mentioned that the industry at the same period had an installed capacity of
146,600,937. The telecommunications sector continues to attract substantial FDI as major
telecommunications company over the world still seek to gain entrance into the Nigerian market.
Nigeria as a country, given her natural resource base and large market size, qualifies to be a major
recipient of FDI in Africa and indeed is one of the top three leading African countries that consistently
received FDI in the past decade. Foreign investors ploughed an unprecedented USD12.4 billion into the
Nigerian economy in 2007 (World Investment Report 2008 – UNCTAD). This is a substantial sum at a time
when more mature world economies were showing the first vital signs of a painful and protracted
slowdown.
According to the latest 10-year forecast from Global Construction Perspectives and Oxford Economics,
construction growth in Nigeria will be the fastest of all markets, by 2020. This is in view of its population
of approximately 140 million which is urbanising at one of the fastest rates in the world. This is expected
to attract considerable investment into construction, oil & gas and other sectors of the economy.
Credit Rating
Fitch Ratings on July 09, 2009 maintained its BB- sovereign rating on Nigeria which was attributed to the
earlier reforms which had resulted in savings of oil windfall, accumulation of foreign assets and a very
strong balance sheet. Meanwhile, the local currency rating was also maintained at BB- reflecting the
development of domestic debt market since 2003.
Standard & Poor’s (S&P) lowered Nigeria’s ratings outlook to negative from stable, citing falling oil
revenues, as a basis for the revision. It however affirmed Nigeria’s BB- foreign currency and BB local
currency long-term sovereign credit ratings. However, some economic & financial analysts, including the
CBN governor Mr. Lamido Sanusi faulted the S&P’s downgrade rating.
Bayelsa State occupies an area of 9,059 square kilometres or just about 1% of the total land mass of
Nigeria. Bayelsa State is located in the heart of the Niger Delta and lies within latitude 04’20’33” and
05’28’39” North, longitude 05’20’00” and 06’43’05” East in the equatorial rain forest. At 185km Bayelsa
State has the longest coastline in Nigeria. Bayelsa State is one of the wealthiest states in Nigeria, but yet
lacks the basic social infrastructure required
for development.
The growth in the oil and gas industry over the past few
years has been severely hampered by the activities of
militants in the Niger Delta region, resulting in massive
reduction in Nigeria’s (and Bayelsa’s) oil and gas
production and consequent reduction in foreign
exchange earnings and the State’s revenue. Recently,
however, an offer of amnesty by the Federal
Government was widely accepted by most militant
groups accompanied with a surrender of arms and offer
of support. The success of the amnesty program is
expected to facilitate a revitalisation of the oil and gas
industry.
Agriculture
The government of Chief Timipre Sylva has identified Agriculture which includes fishery, crop production
and livestock as a key tool to developing Bayelsa. The industry employs in excess of 30%4of its State’s
population and the major crops cultivated include mangoes, cassava, rice, vegetables, plantain, etc. In
addition, the State’s geographical location and natural terrain consisting of rivers, creeks and an array of
fresh water swamp offers enormous potential for its fishery industry. Consequently, investments have
been made in the production and marketing of agriculture produce such as fisheries and sea food, rice,
plantain, bananas and poultry. The State is also focused on the establishment of agro allied-industries to
develop and process agro-based products which are by-products of certain food and cash crops such as
sugar cane, coconut, oil palm, rubber and timber.
Tourism
Bayelsa has a wide variety of customs, traditions, festivals, music and art that supports its tourism
potentials as a tourism destination of choice. As a result, Bayelsa, through the State Ministry of
Information and Culture, and the Bayelsa State Council for Arts and Culture, has adopted strategies to
properly harness and transform the State into a tourist destination of choice. There are currently a number
of tourist attractions already existing in the State. There are two museums namely the Oloidi Museum and
the Mangrove Museum which house a rich collection of artifacts dating back to one hundred years. At
Twon–Brass in Brass Local Government Area (“Brass LGA”), there is the commonwealth graves of British
soldiers who died in the Nembe- British war.
Education
Bayelsa State has a relatively high adult and youth literacy rate, compared to the national average of 65.7%
and 80.2% respectively. The adult literacy rate is relatively higher in the rural areas (68.3%) than in the
urban areas (64.5%). Consequently, youth literacy rate in the urban area of 84.4% is higher than the
literacy rate in the rural area of 82%. The State has a net Secondary school enrolment rate of 49.5%, with
male and female composition of 49.8% and 50.2% respectively5 . The secondary school enrolment was
higher in the urban areas (59.8%) than in the rural areas (49.1%). The secondary school completion rate in
the State is recorded at 17.3%.
Infrastructure
One of the major constraints facing business operations in Nigeria and Bayelsa State in particular is the
weak state of physical and social infrastructure. In recognition of this fact and the challenges it presents,
the Bayelsa State Government has displayed commitment in improving the state of infrastructure through
various initiatives and strategies. The key government initiatives for its improvement of infrastructure are
highlighted below.
• Rehabilitation and upgrading existing electricity distribution networks in the State
• Construction of Senatorial road project will connect the 3 senatorial districts of the State,
• Construction of Bayelsa Airport City due for completion in 2011,
• Construction of Ekole Creek Bridge,
• Construction of Rivers/Bayelsa railway line,
• Construction of the re-designed Melford Okilo Memorial Hospital,
• Construction of Cottage Hospital, Opolo,
• Construction of Peace Park (Isaac Boro Park),
• Construction of New Gate Way road (Glory Drive) into Bayelsa State.
These projects will increase economic activity in the State, facilitate commercial activities and create jobs,
improve accessibility and connectivity across the State, thereby facilitating the movement of goods and
services within and across the border.
Political Environment
Bayelsa State has a vibrant political environment, with the national ruling party, the Peoples Democratic
Party (PDP) also governing the State. The present administration led by His Excellency Chief Timipre Sylva,
Executive Governor of Bayelsa State was inaugurated on May 29, 2007 for a four year term. The three
arms of Government in the State are the Executive, Legislative and the Judiciary. The Executive Council is
made up of the Governor, Deputy Governor, Commissioners, Senior Special Advisers, Special Advisers and
the Secretary to the State Government. The Bayelsa State House of Assembly is the Legislative Arm of
Government while the Judiciary is headed by the Chief Judge/Attorney General of the State. The eight (8)
Local Government Councils in the State are run by their respective Executive Councils and legislative
houses.
Credit Rating
Agusto & Co Limited, the pioneer rating agent in Nigeria, in May 2010, assigned a ‘BB-‘ and ‘A-’ rating to
the Issuer and the Bond Issue respectively. The main rationale behind the positive rating is predicated on
the significant improvement in oil production subsequent to the amnesty programme of the Federal
Government for the Niger Delta militants. Also, notable increases in the international crude oil prices has
led to a sizeable improvement in revenue accruable to the State as a major oil producer. This trend, if
sustained could lead to a rating upgrade.
Fitch Ratings on June 24, 2010 affirmed Bayelsa State’s Long-term foreign and local currency ratings at
'B', respectively, and affirmed its Long-term National rating at 'A-(nga)'. The affirmation of Bayelsa's
ratings follows confirmation that key officials have resumed their duties and state matters in the Finance
Ministry are now running as usual. This removes doubts about the reliability of budgetary information.
Going forward, a higher predictability of state budgetary policies, amid a tight grip on spending, leading
to better-than-anticipated budgetary outcomes could lead to a rating upgrade. Conversely, the state's
ratings may be downgraded if debt or other liabilities grow above expectations amid slow progress in
revenue diversification.
Bayelsa State has undertaken this Bond Issue primarily to reduce its interest costs, improve the overall cash
flow of the State as well as extend the tenor of its facilities to enable it match its infrastructure needs with
longer tenored funds. Accordingly, the State will utilize the sum of N46.484billion to part refinance its
existing obligations.
The estimated net issue proceeds of N46,484,550,000 after the deduction of issue costs of N3,517,465,000
representing 7.03% of the gross issue proceeds will be utilized for the repayment of existing obligation to
lenders listed below. The total offer cost is made up of:
Description N %
Underwriting Fees 1,500,000,000 3
Offer Cost 2,017,465,000 4.03
Brief Description of Projects Executed with the proceeds of the Loan Obligations
In fulfillment of the medium to long term strategy of the State, the State has embarked on the following capital
projects which were financed with the existing loans of the State. The projects are highlighted below:
% of Proposed
Total Project Project Cost to Project Cost to Completion Completion
S/N Project Cost (N) Date (N) Completion (N) Date
Extension of Yenagoa Water
1 Reticulation 567,076,000 482,014,600 85,061,400 85% Dec. 2010
Construction of Gateway from
East-West Link Road to
2 Yenagoa 6,041,000,000 5,014,000,000 1,000,000,000 83% *9 months
Construction of 500 Bed Space
3 General Hospital, Yenagoa 5,620,000,000 2,300,000,000 3,320,000,000 41% June 2011
31 Mw & 3 X 20 Mw Imiringi
4 and Etelebou Gas turbines 14,501,668,537 12,670,156,014 1,831,512,523 87% * 9 months
Construction of Yenagoa
5 Galleria 5,472,989,917 2,227,161,010 3,245,828,907 41% June 2011
Construction of 3 Senatorial August
6 Secondary Schools 6,012,011,803 1,382,762,714 4,629,249,089 23% 2010
7 Hotel Projects 13,839,475,000 3,600,000,000 10,239,475,000 26% June 2011
8 Central Business District 25,419,701,788 13,690,000,000 11,729,701,788 54% June 2012
Construction of Central
Senatorial Road: Yenagoa- * 52
9 Oporoma 44,146,000,140 4,340,000,000 39,806,000,140 10% months
10 Construction of West Senatorial 8,000,000,000 4,200,000,000 3,800,000,000 *36
The State identified water resources as a developmental priority in the medium term. Specifically, the State
Government has identified the need to further improve the access to potable water sources in the State by
expanding the existing water reticulation system in the Yenagoa metropolis. The Yenagoa Water Reticulation
System (phase II) involves a network of underground pipes originating from the Yenagoa main water works
at Okaka and running to individual homes within the city capital. Total length of the extension is expected to
be approximately 55km. The water reticulation extension is expected to provide potable water to over 20
communities in Yenagoa.
The Yenagoa Water Reticulation System project was initiated in 2006 to meet the pressing supply gap of
affordable and quality water services for all Bayelsans. The project is being executed in phases. Prior to this
time a lot of the available water distribution network was a pipeline of about 35km comprising 100mm to
150mm diameter pipes (uPVC). The project is expected to achieve the following:
1. Distribute potable water to the households of all Bayelsa citizens
2. Link and connect all the water works in Yenagoa metropolis from Ovom to Igbogene
The entire reticulation system for the project is expected to cover 101km with phase one and two covering
46km and 55km respectively. The reticulation system (Phase II) is aimed at increasing the water distribution
network and supplying potable water to 20 communities in the Yenagoa. The following communities are to
be covered under the Yenagoa project communities include:
The length of the reticulation system was is about 46 km. Phase I is made up of a fully completed pipeline
network of 46 km with a diameter of 400mm - 160mm diameter. The configuration of the network includes
the following:
• Primary Mains of 400mm, 315mm and 250mm diameter pipes laid along the expressway.
• Secondary Mains of 200mm and 160mm diameter pipes laid along streets like Sanitation, Azikoro,
Okaka, Yenizue-Epie, Nikton, INEC, Otiotio and Ebis roads on both sides.
• In addition about 150 public stand pipes and chambers were also delivered.
The State also plans to reticulate some of the newly constructed internal roads (27 roads with length of
56.64 kilometres). In addition to this, the Ministry of Water Resources also plans to expand capacity at its
current water works facilities to increase the quantity of water generated from 6 million litres a day to 12
million litres per day. Preliminary estimate of this next phase is estimated at about N5 billion.
Status of Work done of the Water Reticulation Project (Phase II) - This excludes the reticulation network
along 11 additional new roads which are yet to be measured. About 48 km out of the 55 km pipeline
network has been completed with the following configuration:
• Primary Mains of 315mm and 250mm diameter pipes along the major highway.
• Secondary Mains of 200mm and 160mm diameter pipes laid along Osiri, Erepa, Mr Biggs, Samphino POP,
Custom, Kimros, Barat, Akan, Opolo, and Green Villa.
The 500-bed hospital is expected to bridge the needed health infrastructure gap for its indigenes.
Specifically, construction and remodelling of 500-Bed Hospital is to provide tertiary health by delivering
specialised health care services such as general surgery, paediatric health care, critical care, accident and
emergency and also provide referral services to the general hospital and primary health care centres in the
state.
The remodelling and reconstruction of the 500-bed hospital has reached an estimated 45% overall
completion. Additional construction work to be carried out on the project includes:
• Construction of laundry and covered walkway
• Refurbishing of auditorium
• Construction of additional waiting area
4. 31Mw & X 20Mw Imiringi and Etelebou Gas turbines - Project Description
The Imiringi Gas Turbine project (“the Imiringi project”) is for the supply and installation of a Rolls Royce,
Model RB211, 31MW gas turbine for the Kolo Creek Power Station. The contract was awarded in March 2006
to Robomichael Limited at a cost of about N3.5 billion. However, the contract value was later revised to
about N6.3 billion. The technical consultant to the Imiringi Gas Turbine project is Micro Golem Nigeria
Limited.
The proposed Etelebou Gas Turbine project (“the Etelebou Project”) is for the supply and installation of
3x20MW gas turbines for Kolo Creek station. This is expected to generate a combined 60MW. The
installation of the Etelebou gas turbines was awarded to Codel International Energy Limited in June 2005, at
an initial cost of N7.7 billion. In addition to the above, there is also an associated project to the Imiringi and
Etelebou projects (“the gas turbine projects”), the Switch Gear project. This project is critical to the
functionality of the gas turbine projects and was awarded to Prosco Investment Limited in May 2008 at an
original contract value of N0.33 billion. The contract was later revised as a result of technical variations to
N0.6 billion.
• Foreign Direct Investment - A key decision criterion in every investment is the cost of energy. Energy
costs are usually high in economic environments in which power supply is unreliable. In order to attract
foreign investment, it is critical for the State’s power supply sector to be re-vitalised. The achievement of
the State’s medium term energy sector goal is expected to make the state a suitable destination for
investors from within and outside the country. The State is also carrying out activities to make its efforts
in the energy sector sustainable through the bush clearing of power lines and the training and
development of people for the maintenance of the power plants and related infrastructure.
• Relatively Low Operating Costs for Commerce and Industry - Public provision of electricity has proven to
be significantly cheaper to the end user when compared to private/individual provision through the use
of electricity generating sets. Likewise, the lack of a public supply of electricity will prevent the
establishment of heavy industries that could create large scale employment and significant economic
growth.
• Health Sector - The provision of health care services is significantly affected by energy costs. Operating
full service healthcare facilities involves a huge consumption of electricity for operating major equipment
such as X-ray machines and scanners, running operating theatres, general wards, intensive care units
etc. Due to the poor public provision of electricity, medical establishments incur huge energy costs that
are passed on to the consumers, making healthcare unaffordable for the majority of the people. Public
provision of electricity will significantly improve the affordability of healthcare services to residents of
the State.
The Project is located within the Ox-bow lake area of Yenagoa, which is being strategically positioned as an
entertainment destination. The Yenagoa Galleria is expected to enjoy good occupancy and visitation based
on the fact that there is no cinema in Yenagoa and it is situated in close proximity to the proposed Central
Business District (“CBD”). It is envisaged that with numerous infrastructure development projects taking place
around the Ox-bow area as well as the wider Yenagoa, the traffic of visitors to the area will expand in future.
The proposed international model secondary schools are to be located in Ovom (Yenagoa), Basambiri
(Nembe) and Sagbama. The implementation of this project will be in compliance with three of the four
priority areas in 2009. These areas include access and equity, standards and quality assurance, funding,
resource mobilization and utilization, for post-basic education. The schools are expected to accommodate
2,500 students each, providing boarding facilities and equipped with science laboratories, workshops and an
ICT building.
The THCC project is expected to provide the following benefits to its immediate community and the entire
State, amongst others:
o Raise the profile of Yenagoa as a destination city for meetings and events;
o Provide employment opportunities for its citizens;
o Income to the BYSG in form of operating profit, infrastructure maintenance levies and other
contributions;
o Further development of the local community
The contract for the construction of the Hotel was awarded to Gito Costruzioni Generali Nigeria Limited
(“Gito”) in 2005 and the works commenced in April 2006 for an initial construction of period of 18 months
up till October 2007. However, due to contractual and operational issues, the contract was further extended
by another 18 months.
Based on the most recent architects’ certificate of work, the THCC is at a 44% degree of completion. The
hotel construction has reached the 16th floor. On the other hand, the small conference centre has reached
roof beam level while the large conference centre has only reached a foundation level.
The Project would be delivered by means of a PPP arrangement. YCDC has been set up as Special Purpose
Vehicle (SPV) to oversee the development and operation of the CBD. In this regard, First Bank of Nigeria and
other potential co-equity and investors will invest directly.
The road will consist of lined side drains that will allow for wrought shuttering to exposed surfaces, and
rough shuttering to unexposed surfaces. The lined side drains shall be provided for by first excavating any
material except rock for the lined drains, and then providing compact concrete Grade 20 to walls of the
drains to make provisions for weep holes. 150 x 300mm precast kerbs in Grade 20 concrete will be laid
along side of road on top of embankment, to make provisions for excavation and bedding.
Based on the outcome of the Medium Term Expenditure Framework (“MTEF”) strategy sessions of the Bayelsa
Ministry of Works and Transport, the broad goals of the State with respect to the transportation sector for
the period 2009-2011 are as follows:
o Facilitate development through the provision of infrastructure within Bayelsa State;
o Reduce cost of living through provision of affordable means of transportation to all parts of Bayelsa
State;
o Control and minimize the effects of natural phenomena such as flood and erosion in Bayelsa State
Specifically, the Yenagoa-Oporoma road project is targeted at partly achieving the first two goals stated
above by providing a good network of roads within the State capital. In particular, the Yenagoa-Oporoma
road is expected to enhance the accessibility of the Yenagoa-Oporoma areas, which are currently
inaccessible by road. The strategic importance is to provide wider access to markets for the rural population.
The status of work done on the Yenagoa-Oporoma Road Project to date is as follows:
o Preliminary site clearing commenced immediately after the road project was awarded to Julius Berger
at a cost of N38 billion;
o Site clearing has been carried out to about 90% and sand is going toward Igeibiri from Angiama,
which is about 17km;
o Overall, the road project is about 10% from completion;
o Total expenditure on the project amounts to about N4.3 billion; and
10. Construction of West Senatorial Road Project Yenagoa – Agge (Phase II)
The proposed Yenagoa-Agge road will be developed in 2 phases as follows:
• Phase I: Ogobiri-Toruebeni Road; and
• Phase II: Toruebeni-Agge road.
Phase I of the road project which covers about 6.1km will commence at Ogobiri and slope eastwards towards
Toruebeni. While phase II of the project, which covers about 82.9km, will commence at Toruebeni and move
northward towards Aleibiri, parallel to the Bomadi Creek. It will terminate at 40km on the outskirts of
Ekeremor town. The entire road project is the first phase of the Bayelsa West Senatorial road, and will be
designed as a two-lane carriageway covering a total length of approximately 89km. The road will consist of
about 6 bridges with a cumulative length of about 180 metres and will have the following finishing:
• 40mn Asphaltic wearing course;
• 50mn, Asphaltic binder course;
• 150mn, minimum stabilised sand/ soil well compacted sub-base; and
• 150mn, minimum granite chippings crushed rock base by the wet process
The proposed Yenagoa-Agge road project is expected to provide the similar social and economic
benefits as the Yenagoa-Oporoma Road Project.
Future Projects
The State is also planning to embark on the following projects which are strategic to the economic
development of the State:
Total Project Cost
S/N Project (N)
1 Epie Creek Aquaculture Fish Farm 429,000,000
2 Peremabiri Isampou Rice Project 2,030,000,000
3 Construction of East Senatorial Road: Nembe-Brass 42,038,840,848
Total 44,497,840,848
The project will focus on the rearing of catfish and tilapia species, which would be processed and eventually
sold at a margin, at prevailing market rates. Partnership arrangements between the State and ONIDA
Enterprises Limited, a private sector company also involved in fish rearing in Vietnam, are being negotiated,
though binding arrangements have not been finalised.
In addition to the Epie Creek Aquaculture Project, the Bayelsa State Government is promoting a number of
other initiatives with private sector participation. Some of these projects include:
• Borrow Pits Project: consisting 44 borrow pits spread across the capital city and owned by the State/
Communities, in partnership with the private sector.
• Trawler Fishing Project: the State has acquired two vessels, for exploration of aquatic resources in
the deep seas. Full exploration is expected to start in 2010.
• Marine Shrimp Farming: involving the culture of marine shrimp in a semi-natural environment, in
two cycles annually, for harvesting and sale to the general public.
The terrain of the proposed project sites for the Rice Project represent excellent sites for rice production and
would contribute to enhancing the project’s feasibility. The project will focus on the planting, harvesting and
processing of rice crops. The processed and bagged rice would subsequently be sold for profit at prevailing
market rates.
The Nembe-Brass road is the third and final phase of the Bayelsa East Senatorial road. The road is designed
as a two lane road with width of 12.3 metres and an approximate drive surface of 7.3 metres51. The road
will consist of about 16 bridges with a cumulative length of about 1.5 kilometres52. The project construction
period is expected to be forty-eight (48) months. The construction of the Nembe-Brass road will commence
at the Kalatoru Creek and stretch towards Kiberi Creek. The road meanders in the direction of the St.
Nicholas River. From St. Nicholas River, the road will continue in the following order:
o Okpoama Creek to Diemo Creek;
o Diena Creek to Okpoama settlement;
o Okpoama settlement to Ewoama settlement
o Ewoama settlement to Brass settlements; and
o Terminates at the Brass River.
The various project activities for the development of the road include the following:
o Deforestation and land filling;
o Aquatic destruction;
o Technical evaluation and project management;
o Construction, installation, and re-positioning of high pressure oil pipeline;
o Dredging, piling and structural work for manifold construction and installations;
o Project planning with particular emphasis on health, safety and environment performance,
sustainable community relation policies; and
o All aspects of civil, foundation, reservoir, engineering and construction.
Project Objectives
The objectives of the transport sector as stated in the 2009-2011 MTSS of the Bayelsa State Ministry of
Works and Transport, are as follows:
o Facilitate development through the provision of infrastructure within Bayelsa State;
o Reduce cost of living through provision of affordable means of transportation to all parts of Bayelsa
State; and
o Control and minimize the effects of natural phenomena such as flood and erosion in Bayelsa State
Specifically, the Nembe-Brass road project is targeted at partly achieving the first two goals stated above by
meeting the following objectives:
o To provide effective and efficient land transportation system for the State; and
o To provide necessary road networks to link the three (3) senatorial zones to the State capital.
In particular, the Nembe Brass road is expected to enhance the accessibility of the Nembe and Brass areas
which are currently inaccessible by road. This is particularly vital given the strategic importance of the Brass
LNG project expected to take off in 2011.
Project Status
The current status of the proposed Nembe Brass road project is as follows:
o Engineering consultants employed by the Ministry of Works & Transport have concluded road
designs and initial project costing.
o The Environment Impact Assessment (“EIA”) study of the Project, which was estimated at about N75
million was awarded to Atlantic Fredim Investment Company Limited. The report has since been
submitted.
o A construction contractor, Moreno Plc, has been engaged to build the proposed road at a cost of
N42 billion.
21 June 2010
and
Gentlemen
We have reviewed the accounting basis and assumptions for the revenue and expenditure projections of Bayelsa State of Nigeria ("the State")
for the year ended 31 December 2009 and the eight years ending 31 December 2017, for which the Executive Council of Bayelsa State
Government of Nigeria ("BYSG") is solely responsible.
We wish to emphasize that no business is free of major risks and few financial projections are free of errors of commissions or omissions.
Consequently, these financial projections relate to the future and may be affected by unforeseen events as there may be differences between
forecast, estimated, budgeted or projected results and the actual results because events and circumstances frequently do not occur as
expected, and those differences may be material.
Subject to this, in our opinion, the revenue and expenditure projections so far as the accounting basis and assumptions are concerned, have
been properly compiled based on the assumptions made by the State Executive Council and are presented on a basis consistent with the
accounting policies normally adopted by the State.
Yours faithfully
Bosede A Odeloye
For : Akintola Williams Deloitte
The Executive Council of Bayelsa State Government of Nigeria is of the opinion that subject to unforeseen circumstances, the State's revenues
and expenditures for the year ended 31 December 2009 and each of the eight years ending 31 December 2017 will be approximately as
follows:
The Executive Council of Bayelsa State hereby approved the Memorandum on the financial projections for the year ended 31 December 2009
and each of the eight years ending 31 December 2017, a copy of which has been initialed by the Honourable Commissioner for Finance of the
State for identification purpose.
YENAGOA, NIGERIA
Bayelsa State was created by the Military Government on 1 October 1996 out of the old Rivers State. The State is bounded on the West
by Rivers State, on the East and South by the Atlantic Ocean and on the North by Delta State. It has a land mass of 10,773 km², a
population of about 1.7 million as at 2006 and is divided into eight (8) Local Government Areas (LGAs). Bayelsa State has one of the
largest crude oil and natural gas deposits in Nigeria, resulting in extensive petroleum production in the State.
Redemption plan: The Bond principal shall be redeemed at par at maturity while the coupon shall be repaid in fourteen
(14) equal semi-annual instalments of N7.75 billion each on 30 June and 31 December beginning
from 31 December 2010.
The following significant accounting policies will be adopted by Bayelsa State of Nigeria during the projected period:
The financial statements were prepared under the historical cost convention using the cash basis of accounting.
(ii) Investments
Investment in shares are held under the Ministry of Finance Incorporated (MOFI) and are stated at cost while bonus issues are shown but
not considered in value recognition. All investment income received are credited to Consolidated Revenue Fund account.
(iii) Revenue
(iv) Expenditure
Transactions in foreign currencies are converted to Naira at the rates of exchange ruling at the dates of the transaction. Foreign
currency balances are converted to Naira at the rates of exchange ruling at the statement of assets and liabilities date. Gains or losses
arising on translation when realised, are credited or debited to the Consolidated Revenue Fund.
Revenues:
Recurrent revenue 87,946 84,007 109,966 140,815 138,644 152,707 169,201 190,667 210,699
Capital revenue 3,965 5,417 5,579 5,964 6,809 7,774 8,875 10,131 11,566
91,911 89,424 115,545 146,779 145,453 160,480 178,075 200,798 222,266
Expenditures:
Recurrent expenditure 64,248 69,938 67,375 70,333 74,901 78,232 83,364 87,192 86,163
Capital expenditure 20,713 9,297 19,437 42,662 45,577 53,464 69,443 89,703 113,118
84,961 79,235 86,812 112,996 120,478 131,696 152,807 176,895 199,281
Surplus of revenue
over expenditure 6,950 10,189 28,733 33,783 24,975 28,784 25,268 23,903 22,985
Bond proceeds - 46,000 - - - - - - -
Proceeds from
internal loans 63,048 - - - - - - - -
Net revenue 69,998 56,189 28,733 33,783 24,975 28,784 25,268 23,903 22,985
Appropriations:
Repayment of
internal loans (80,495) (46,924) (9,381) (6,205) (3,323) (1,534) - - -
Repayment of
external loans (157) (157) (157) (157) (157) (157) (157) (157) (157)
Transfer to Sinking
fund for Bond
repayments - (8,687) (14,893) (14,893) (14,893) (14,893) (14,893) (14,893) (6,205)
Transfer to Security
Fund - (3,345) (4,335) (5,372) (6,376) (6,498) (6,337) (7,199) (7,969)
(Deficit)/surplus for
the year (10,655) (2,924) (33) 7,156 226 5,703 3,881 1,654 8,653
3.2 Basis
(i) The financial projections include results as shown by the audited financial statements of the State for the six months ended 30 June 2009.
(ii) The actual results per the audited financial statements for the six months ended 30 June 2009 and the estimates for the remaining six months of the
year ended 31 December 2009; and the years ending 31 December 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 have been prepared on a basis
consistent with Government Accounting Policies and Financial Regulations.
3.3 Assumptions
The following assumptions have been made and are expected to remain in operation throughout the projected period:
(i) The Federation Account, Excess Crude Oil and Value Added Tax revenue sharing formula would not alter significantly from those used in
preparing the projections.
(ii) There will be no significant changes in Federal and State Governments' monetary and fiscal policies during the forecast period that will
adversely affect Bayelsa State.
(iii) Nigeria's current crude oil production level would remain stable while crude oil price will not fall below US$52.0 per barrel during the
forecast period.
(iv) The population of Bayelsa State in relation to that of Nigeria will range between 1.18% and 1.21% during the forecast period.
(v) The 50,000,000 units of N1,000 each on offer at par will be fully subscribed and the proceeds of the Offer will be received during the
second half of 2010.
(vi) The interests on the Bond shall accrue semi-annually to a Sinking Fund account while payment of principal and interest shall be made
from the Sinking Fund Account to be managed by the Trustees.
(vii) The Bond principal shall be redeemed at par at maturity while the coupon shall be repaid in fourteen (14) equal semi-annual instalments
of N7.75 billion each on 30 June and 31 December beginning from 31 December 2010.
(viii) Internally generated revenue is expected to increase by 23% per annum from 2010 to 2017.
(ix) Excess crude revenue has been estimated based on the difference between forecast benchmark and forecast actual price of oil during the
forecast period while the revenue accruing annually is shared according to the same revenue sharing formula for statutory allocation.
(xi) Capital expenditure will be based on availability of funds during the forecast period. However, a cumulative average growth rate of 23.6%
is projected during the forecast period.
(xii) 5% of the State's Federal Allocation Revenue (comprising of statutory allocation, VAT and mineral oil derivation) shall be transferred to a
State Reserve Fund annually for savings purposes.
(xiii) Revenue from Value Added Tax (VAT) will increase by 37% in 2010, 3% in 2011, 7% in 2012 and by 14% annually from 2013 to 2017.
(xiv) Recurrent expenditure will range between 45% and 76% of recurring revenue during the projected period.
(xv) Inflation rate in Nigeria will be at an annual average of 8.2% during the projected period.
(xvi) The economic and political climate of Nigeria will remain stable.
(xvii) No act of God that may adversely affect the projections is envisaged.
Audited
31-Dec <----------------------------------- Projected as at 31 December ---------------------------------->
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
ASSETS:
Cash & bank balances 12,511,721 1,857,166 1,181,236 2,863,883 6,180,242 6,405,845 12,108,477 15,989,481 17,643,786 26,421,230
Investments 12,041,983 12,041,983 13,114,489 15,881,798 25,093,795 31,469,537 37,967,394 44,304,551 51,503,513 59,472,323
24,802,060 14,147,505 14,444,081 18,745,681 31,274,038 37,875,382 50,075,871 60,294,032 69,147,299 85,893,553
REPRESENTED BY:
Consolidated Revenue Fund (1,169,869) 170,177 363,091 (202,555) 651,634 645,291 1,038,916 988,582 2,214,072 12,542,883
Capital Development Fund 25,971,929 13,977,328 10,735,978 11,268,606 17,570,592 17,802,537 23,111,544 27,042,882 27,471,697 25,920,330
State Security Fund - - 3,345,012 7,679,630 13,051,812 19,427,554 25,925,411 32,262,568 39,461,530 47,430,340
24,802,060 14,147,505 14,444,081 18,745,681 31,274,038 37,875,382 50,075,871 60,294,032 69,147,299 85,893,553
55
5. PROJECTED CONSOLIDATED REVENUE FUND (CRF)
2009 2009 2009 2010 2011 2012 2013 2014 2015 2016 2017
Note N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Recurrent receipts:
Internally generated revenue 1,239,749 2,290,805 3,530,554 4,211,967 5,180,306 6,371,267 7,836,033 9,637,551 11,853,241 14,578,322 17,929,904
Statutory allocation 7,393,391 6,111,762 13,505,153 12,634,632 13,498,554 15,966,661 21,902,002 25,078,052 25,266,079 28,722,008 32,003,074
13% Mineral resources revenue 19,859,532 17,360,388 37,219,920 48,848,774 67,614,495 85,512,635 98,803,741 97,105,582 92,602,549 105,125,760 115,806,640
Excess crude oil revenue 9,715,902 10,834,585 20,550,487 18,311,481 23,672,575 32,964,033 10,102,300 20,885,802 39,479,003 42,240,801 44,959,433
Other miscellaneous revenue 13,139,442 - 13,139,442 - - - - - - - -
Total recurrent receipts 8.1 51,348,016 36,597,540 87,945,557 84,006,853 109,965,930 140,814,596 138,644,076 152,706,988 169,200,872 190,666,891 210,699,051
Personnel costs 8,163,208 9,786,468 17,949,676 17,949,676 19,403,600 19,403,600 20,858,870 20,858,870 22,423,285 22,423,285 24,105,032
Consolidated revenue fund charges 9,001,462 9,115,538 18,117,000 22,397,571 16,901,512 18,306,389 19,787,930 21,405,544 23,175,176 25,115,284 20,421,439
Overhead costs 10,063,555 18,117,738 28,181,293 29,590,358 31,069,876 32,623,369 34,254,538 35,967,265 37,765,628 39,653,909 41,636,605
Total recurrent expenditures 8.2 27,228,225 37,019,744 64,247,969 69,937,605 67,374,988 70,333,359 74,901,337 78,231,678 83,364,089 87,192,478 86,163,076
CRF brought forward (1,169,869) (43,370,453) (1,169,869) 170,177 487,198 1,921,552 2,775,741 2,769,399 3,163,024 3,112,689 4,338,179
22,949,922 (43,792,657) 22,527,719 14,239,426 43,078,140 72,402,789 66,518,479 77,244,708 88,999,807 106,587,102 128,874,154
Appropriations:
Repayment of internal loans (66,263,271) (14,231,779) (80,495,050) (46,923,839) (9,381,443) (6,204,905) (3,323,378) (1,533,867) - - -
Repayment of external loans (57,104) (100,000) (157,104) (157,104) (157,104) (157,104) (157,104) (157,104) (157,104) (157,104) (157,104)
Transfer to Sinking Fund for Bond
repayments 8.3 - - - (8,687,500) (14,892,857) (14,892,857) (14,892,857) (14,892,857) (14,892,857) (14,892,857) (6,205,357)
Transfer to Security Fund 8.4 - - - (3,345,012) (4,334,618) (5,372,182) (6,375,742) (6,497,857) (6,337,157) (7,198,962) (7,968,810)
56
Transfer to/from Capital
Development Fund - - 58,294,613 45,361,227 (12,390,566) (43,000,000) (39,000,000) (51,000,000) (64,500,000) (80,000,000) (100,000,000)
CRF carried forward (43,370,453) (58,124,436) 170,177 487,198 1,921,552 2,775,741 2,769,399 3,163,024 3,112,689 4,338,179 14,542,883
6. PROJECTED CAPITAL DEVELOPMENT FUND (CDF)
Capital receipts:
Value Added Tax (VAT) 1,938,725 2,026,275 3,965,000 5,416,831 5,579,313 5,964,348 6,809,098 7,773,503 8,874,511 10,131,473 11,566,481
Bond proceeds - - - 46,000,000 - - - - - - -
Transfer from Consolidated Revenue
Fund - (58,294,613) (58,294,613) (45,361,227) 12,390,566 43,000,000 39,000,000 51,000,000 64,500,000 80,000,000 100,000,000
Total capital receipts 64,986,726 (56,268,338) 8,718,388 6,055,604 17,969,879 48,964,348 45,809,098 58,773,503 73,374,511 90,131,473 111,566,481
Capital expenditures:
Economic sector 5,277,926 2,016,429 7,294,355 4,620,586 9,660,314 21,203,194 22,651,845 26,571,854 34,513,256 44,582,221 56,219,570
Social service sector 6,829,783 549,322 7,379,105 1,292,277 2,701,778 5,930,068 6,335,224 7,431,565 9,652,601 12,468,669 15,723,381
Environmental development sector 2,231,549 1,641,780 3,873,329 1,738,530 3,634,766 7,977,862 8,522,928 9,997,861 12,985,873 16,774,397 21,153,038
General administration 1,745,168 421,031 2,166,199 1,645,561 3,440,393 7,551,238 8,067,156 9,463,216 12,291,441 15,877,370 20,021,859
Total capital expenditure 8.6 16,084,426 4,628,563 20,712,989 9,296,954 19,437,251 42,662,362 45,577,153 53,464,496 69,443,172 89,702,658 113,117,848
Net capital receipts/(expenditures) 48,902,300 (60,896,901) (11,994,601) (3,241,350) (1,467,372) 6,301,985 231,945 5,309,007 3,931,339 428,815 (1,551,367)
CDF brought forward 25,971,929 74,874,229 25,971,929 13,977,328 10,735,978 9,268,606 15,570,592 15,802,537 21,111,544 25,042,882 25,471,697
57
CDF carried forward 74,874,229 13,977,328 13,977,328 10,735,978 9,268,606 15,570,592 15,802,537 21,111,544 25,042,882 25,471,697 23,920,330
7. PROJECTED STATEMENT OF CASHFLOWS
Projected
year ended
Audited 31-Dec <----------------------- Projected for the years ending 31 December ----------------------->
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
FINANCIAL FORECASTS
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Inflows:
Statutory allocation 20,130,867 13,505,153 12,634,632 13,498,554 15,966,661 21,902,002 25,078,052 25,266,079 28,722,008 32,003,074
Value Added Tax 3,664,567 3,965,000 5,416,831 5,579,313 5,964,348 6,809,098 7,773,503 8,874,511 10,131,473 11,566,481
13% Mineral revenue 65,698,003 37,219,920 48,848,774 67,614,495 85,512,635 98,803,741 97,105,582 92,602,549 105,125,760 115,806,640
Excess crude fund 61,777,252 20,550,487 18,311,481 23,672,575 32,964,033 10,102,300 20,885,802 39,479,003 42,240,801 44,959,433
Internally Generated Revenue 3,776,680 2,868,354 3,516,657 4,450,230 5,604,688 7,031,125 8,792,397 10,965,829 13,646,540 16,951,533
Others 534,802 13,139,442 - - - - - - - -
Total inflows 155,582,171 91,248,356 88,728,374 114,815,168 146,012,364 144,648,266 159,635,336 177,187,971 199,866,581 221,287,161
Outflows:
Personal emoluments 18,885,169 17,949,676 17,949,676 19,403,600 19,403,600 20,858,870 20,858,870 22,423,285 22,423,285 24,105,032
Consolidated revenue fund charges 54,740,572 18,117,000 22,397,571 16,901,512 18,306,389 19,787,930 21,405,544 23,175,176 25,115,284 20,421,439
Overhead costs 14,806,613 28,181,293 29,590,358 31,069,876 32,623,369 34,254,538 35,967,265 37,765,628 39,653,909 41,636,605
Net cash flows (to)/ from financing activities (22,680,777) (17,604,153) (9,668,443) (24,283,048) (21,254,866) (18,373,339) (16,583,828) (15,049,961) (15,049,961) (6,362,461)
58
equivalents (1,677,365) (10,654,555) (551,823) 1,682,647 3,316,360 225,603 5,702,632 3,881,004 1,654,305 8,653,337
Cash & cash equivalents at 01 January 14,189,086 12,511,721 1,857,166 1,305,343 2,987,990 6,304,350 6,529,952 12,232,584 16,113,588 17,767,893
Cash & cash equivalents at 31 December 12,511,721 1,857,166 1,305,343 2,987,990 6,304,350 6,529,952 12,232,584 16,113,588 17,767,893 26,421,230
FINANCIAL FORECASTS
The State has experienced a significant reduction in its revenues over the past eighteen (18) months due to the following reasons:
- the effects of global crisis on oil prices and its implications for Nigeria’s revenue; and
- the reduction of oil production levels resulting in reduction of the State’s share of mineral derivation revenue due to the activities of Niger
Delta militants.
However, revenue generated from oil by the Federal Government is anticipated to improve during the projected period as relative stability is
expected in the region.
The Bayelsa State Government has embarked on several efforts aimed at enhancing the efficiency of its operations and enforcing fiscal
responsibility. In line with this, the State intends to control its expenditures during the projected period with a view to reduce inefficiencies of
previous years. Some of the programs being implemented to achieve this will include:
- partnering with the World Bank towards a fiscally responsible expenditure process and development of a Medium-Term Expenditure
Framework. Through this program, the World Bank will monitor the State’s expenditure process and help to eliminate wastages;
- compliance with the Fiscal Responsibility Law; and
- adoption of a strategy to allocate a fixed monthly sum of N1 million overheads for Ministries, Departments and Agencies (MDAs) in the
State.
The State also anticipates a reduction in security spending in view of the success of the recent amnesty programme being put in place by the
Federal Government.
An amount of N14.89 billion shall be set aside annually from the Consolidated Revenue Fund to a Sinking Fund account to be managed by the
Trustees. Both principal and interest repayments shall be made from the Sinking Fund Account as follows:
Annual ISPO deduction 8,687 14,893 14,893 14,893 14,893 14,893 14,893 6,205
8,687 20,634 29,210 38,321 48,001 58,285 69,210 22,129
Interest on investment 929 1,433 1,968 2,537 3,141 3,782 4,464
9,616 22,067 31,178 40,858 51,142 62,067 73,674 22,129
Repayments - Coupon (3,875) (7,750) (7,750) (7,750) (7,750) (7,750) (7,750) (3,875)
- Principal - - - - - - (50,000)
Balance c/f 5,741 14,317 23,428 33,108 43,392 54,317 15,924 18,254
Section 38 (3) of the Bayelsa State Fiscal Responsibility Law 2009 requires that 5% of the State's Federal Allocation Revenue (comprising of
statutory allocation, VAT and mineral oil derivation) shall be transferred to a State Reserve Fund for savings purposes, which can only be spent
by the State Executive Governor for specific purposes as may be authorised by the BYSG legislatures.
The internal loan obligations of the State amounted to N65.46 billion as at 30 June 2009. The State has an agreement with its principal
lenders to utilise an amount of N35 billion from the Bond proceeds to refinance part of the loan. The balance of the Bond proceeds after the
refinancing will be utilised in completing infrastructure and other economic projects in the State.
Capital expenditures will be based on availability of fund during the projected period. However, preference will be given to a sharing ratio of
49.7%, 13.9%, 18.7% and 17.5% in favour of economic sector, social sector, environmental development sector and general administration
respectively.
Dear Sirs,
BAYELSA STATE GOVERNMENT OF NIGERIA N50,000,000,000 FIXED RATE DEVELOPMENT BOND (“BOND ISSUE”)
2010/2017
We write with reference to the Prospectus issued in respect of the Offer for Subscription of N50,000,000,000 Fixed
Rate Development Bond 2010/2017. The Prospectus contains the revenue and expenditure projection of the State
for the eight years ending December 31, 2017.
We have discussed with you and the Reporting Accountants, Akintola Williams Deloitte, the bases and assumptions
upon which the projections were made. We have also considered the letter dated June 21, 2010 from the Reporting
Accountants regarding the accounting bases and calculations upon which the projections were compiled.
Having considered the assumptions made in preparing the forecast, as well as the accounting bases and
calculations reviewed by the Reporting Accountants, we consider that the projections (for which you all as members
of the Bayelsa State Executive Council are solely and fully responsible) have been made after due and careful
enquiry.
Yours faithfully,
21 June 2010
and
Gentlemen
We have examined the audited financial statements of Bayelsa State of Nigeria (" the State") for the five years and six months ended 30 June 2009. The
financial statements were prepared on cash basis. The financial statements in respect of the accounting periods under review were audited by the
Auditor-General of the State, who issued clean audit opinions on them. No audited financial statements of the State have been prepared for period
subsequent to 30 June 2009.
The accompanying financial information is based on the audited financial statements of the State after making such adjustments as we considered
appropriate. The principal adjustments are stated in Note 6.14 to the financial information.
Except for the observations contained in notes 6.1, 6.2 and 6.11; in our opinion, the financial information together with the notes thereon give a true
and fair view of the assets and liabilities, revenue and expenditure and the cash flows of Bayelsa State of Nigeria for the five years and six months
ended 30 June 2009.
Yours faithfully
Bosede A Odeloye
For : Akintola Williams Deloitte
The significant accounting policies adopted by Bayelsa State of Nigeria are as follows:
The financial statements were prepared under the historical cost convention using the cash basis of accounting.
(ii) Investments
Investment in shares are held under the Ministry of Finance Incorporated (MOFI) and are stated at cost while bonus issues are added to
the number of units owned but not considered in value recognition. All investment income received are credited to Consolidated
Revenue Fund account.
(iii) Revenue
(iv) Expenditure
Transactions in foreign currencies are converted to Naira at the rates of exchange ruling at the dates of the transaction. Foreign
currency balances are converted to Naira at the rates of exchange ruling at the statement of assets and liabilities date. Gains or losses
arising on translation when realised, are credited or debited to the Consolidated Revenue Fund.
ASSETS
Cash & bank balances 6.1 19,213,437 12,511,721 14,189,086 2,545,211 35,409,245 17,007,365
REPRESENTED BY:
The accounting policies on page 61 and notes on pages 66 to 71 form part of these financial statements.
Internally generated revenue 6.4 1,239,749 3,558,333 1,764,345 2,729,475 964,416 1,020,302
13% Mineral resources revenue 6.6 19,859,532 65,698,005 57,689,058 78,097,215 73,114,653 47,396,470
Excess crude oil revenue 6.7 9,715,902 61,777,252 19,043,522 25,345,396 18,301,952 8,210,928
Other miscellaneous revenue 6.8 13,139,442 1,356,816 14,024,230 5,155,363 5,571,658 10,374
EXPENDITURE
Consolidated revenue fund charges 6.9 9,001,462 14,806,613 19,395,384 8,105,413 3,875,764 3,574,057
Overhead costs 10,063,555 54,740,572 40,095,974 53,279,538 18,964,741 14,646,685
Appropriations:
The accounting policies on page 61 and notes on pages 66 to 71 form part of these financial statements.
6 months ended
30-Jun <-------------- Year ended 31 December --------------->
2009 2008 2007 2006 2005 2004
Notes N'000 N'000 N'000 N'000 N'000 N'000
Capital receipts:
Value Added Tax (VAT) 6.10 1,938,725 3,664,567 2,831,596 2,702,729 1,708,404 1,504,063
Capital expenditures:
Economic sector 5,277,926 23,583,975 48,810,967 40,904,398 24,808,868 12,673,512
Social service sector 6,829,783 11,963,691 12,679,881 18,861,428 12,738,991 5,964,370
The accounting policies on page 61 and notes on pages 66 to 71 form part of these financial statements.
6 months ended
30-Jun <------------ Year ended 31 December ------------>
2009 2008 2007 2006 2005 2004
N'000 N'000 N'000 N'000 N'000 N'000
Cash flows from operating activities:
Receipts:
Statutory allocation 7,393,391 20,130,867 16,206,041 14,965,290 12,759,595 12,124,442
Value Added Tax 1,938,725 3,664,567 2,831,596 2,702,728 1,708,405 1,504,065
13% Mineral revenue 19,859,532 65,698,003 57,689,058 78,097,217 73,114,653 47,396,469
Excess crude fund 9,715,902 61,777,252 26,335,742 25,345,396 18,301,950 2,000,237
Internally Generated Revenue 1,239,749 3,776,680 2,625,331 2,801,366 1,720,482 917,435
Miscellaneous I 13,049,003 34,802 5,540,669 3,637,648 4,452,888 6,210,692
Miscellaneous II - 500,000 - 20,000 338,980 -
Total receipts 53,196,302 155,582,171 111,228,437 127,569,645 112,396,953 70,153,340
Payments:
Personal emoluments 8,163,208 18,885,169 14,577,490 14,570,774 7,523,218 6,972,693
Overhead costs 9,001,462 54,740,572 40,095,975 53,279,538 18,964,741 14,646,686
Consolidated revenue fund
charges 10,063,555 14,806,613 9,089,492 8,605,037 4,057,094 3,605,396
Economic sector 5,277,926 24,083,975 48,849,967 38,502,648 24,814,202 12,042,952
Social sector 6,829,783 11,963,691 12,679,881 18,861,428 12,738,991 5,970,585
Environmental sector 2,231,549 5,216,219 10,063,883 8,698,166 10,114,234 3,755,452
General administration 1,745,168 5,209,637 8,745,232 22,573,505 12,233,688 7,063,870
Total payments 43,312,651 134,905,876 144,101,920 165,091,096 90,446,168 54,057,634
6 months ended
30-Jun <------------- As at 31 December ------------->
2009 2008 2007 2006 2005 2004
N'000 N'000 N'000 N'000 N'000 N'000
6.1 CASH AND BANK BALANCES
Cash & bank balances 11,377,167 5,598,475 14,150,029 1,545,211 23,182,058 10,777,168
Fixed deposits 7,836,270 6,913,246 39,057 1,000,000 12,227,187 6,230,197
We were unable to confirm the existence and valuation of cash and bank balances totalling N16.10 billion in 2004, N17.97 billion in 2005, N 0.79
billion in 2006, N2.21 billion in 2007, N2.53 billion in 2008 and N18.24 billion as at 30 June 2009.
6.2 INVESTMENTS
6.2.1 Summary
Quoted 8,297,703 8,297,703 8,224,910 5,324,617 3,978,524 2,378,199
Unquoted 3,744,280 3,744,280 3,243,323 2,754,470 1,715,946 195,947
6.3 ADVANCES
6.3.1 Summary
Hotel loans (note 6.3.2) 248,356 248,356 246,356 280,000 - -
Vehicle loans (note 6.3.3) - - - 280,257 323,579 314,508
Other advances (note 6.3.4) - - 1,629,003 2,310,020 - -
6 months ended
30-Jun <----------- Year ended 31 December ----------->
2009 2008 2007 2006 2005 2004
N'000 N'000 N'000 N'000 N'000 N'000
6.4.1 Summary
Fines and fees 11,636 107,211 56,444 89,673 32,842 51,474
Earnings and sales 27,787 258,742 33,396 25,047 14,684 16,755
Rent on Government properties 9,668 7,679 7,155 17,730 9,695 9,523
Licence fees 4,637 17,924 26,709 16,094 6,853 8,405
Interest and dividends (note 6.4.2) 98,219 1,103,667 330,415 1,425,824 362,704 113,240
Taxes (direct and indirect) 1,087,802 2,063,110 1,310,226 1,155,107 537,638 820,905
6 months ended
30-Jun <----------- Year ended 31 December ----------->
2009 2008 2007 2006 2005 2004
N'000 N'000 N'000 N'000 N'000 N'000
6.7 EXCESS CRUDE OIL REVENUE
6.8.1 Summary
Refund from Paris Club (note 6.8.2) - 34,802 5,481,105 - - -
Pensions to FG retirees - - 59,505 - - -
Ecological Fund - - - 20,000 - -
Net Statutory & Mineral revenue - - - 3,637,648 - -
Soku distribution (note 6.8.3) - - 7,292,219 - - -
Escrow account - - - - 4,452,888 -
Recovery fund 12,744,050 - - - - -
Bim Tax/Levy 390,164 1,322,014 1,029,360 1,468,407 892,394 -
Miscellaneous 5,228 - 162,041 29,308 226,376 10,374
Statutory transfer to local government 1,299,685 5,907,638 3,327,428 3,722,334 1,613,693 1,552,000
Contribution to State Primary
Education Board 1,164,880 2,940,854 794,250 314,414 269,224 253,610
Pensions and gratuities 1,435,119 2,641,746 1,773,524 1,468,487 974,707 864,229
Bank charges 2,038,597 2,572,812 2,768,463 2,034,867 843,346 801,118
Other charges 3,063,181 743,563 10,731,719 565,311 174,794 103,100
6 months ended
30-Jun <------------ Year ended 31 December ------------>
2009 2008 2007 2006 2005 2004
N'000 N'000 N'000 N'000 N'000 N'000
6.10 VAT RECEIPTS
6.11.1 Summary
Balance as at 1 January 62,634,430 73,505,231 9,796,369 - 119,607 541,096
Additions per CDF 63,048,001 5,000,000 62,836,515 8,662,335 - -
Repayments (66,263,271) (29,694,221) (6,179,485) (81,864) (181,331) (452,827)
Unreconciled differences (note 6.11.4) 6,037,096 13,823,420 7,051,832 1,215,898 61,724 31,338
We were unable to reconcile the differences of N0.03 billion, N0.06 billion, N1.21 billion, N7.05 billion, N13.82 billionand N6.04 billion in the movement on internal
loans for the years ended 31 December 2004, 2005, 2006, 2007, 2008 and 30 June 2009 respectively, due to inconsistent information provided in the audited financial
statements for the relevant years. Confirmation was received from Bank PHB Plc in respect of oustanding balances as at 31 December 2007 and 2008. No confirmation of
balances was received from the other lenders.
As at 30 June 2009, undrawn balance on the World Bank loan amounted to US$944,416.57.
Per audited financial statements 19,213,437 12,511,721 14,189,086 2,545,211 36,903,485 17,007,365
Adjustment:
Adjustment for unpresented cheques
in 2005 - - - - (1,494,240) -
Per audited financial statements (42,477,289) (276,705) 404,507 10,229,214 42,108,850 10,658,601
Adjustments:
Reversal of duplication of VAT
(Capital receipt) in CRF and CDF (1,504,065) (1,504,065) (1,504,065) (1,504,065) (1,504,065) (1,504,065)
Per audited financial statements 10,933,063 25,078,765 27,128,171 3,265,361 812,684 9,237,418
Adjustments:
Reversal of overstatement in balance
transferred from CRF (610,901) (610,901) (610,901) (610,901) (610,901) (610,901)
Mitigating Factor
Although, the political and regional instability in the Niger Delta region has had a material adverse effect
on investment and confidence in, and the performance of, the Nigerian economy, the Federal
Government has embarked on a number of initiatives to address the instability and unrest in the region.
Part of these initiatives include granting unconditional amnesty to former militants who surrendered
their arms and ammunition by 04 October 2009, and a proposal to offer a 10% equity stake to host
communities in all joint venture businesses that the FGN is a party to.
Mitigating Factor
The Jonathan administration remains committed to economic reforms aimed at diversifying Nigeria’s
economy and increasing macroeconomic stability whilst promoting a private sector market-driven
economy. In addition, the government’s annual budget is pegged at a rate lower than the average
trading price of crude oil. This reduces the country’s exposure to the volatility in oil price.
C. Emerging markets such as Nigeria are subject to greater risks than more developed markets, and
financial turmoil in any emerging market could cause the price of the Bonds to decrease.
Generally, investment in emerging markets is only suitable for sophisticated investors who fully
appreciate the significance of the risks involved in, and are familiar with, investing in emerging markets.
Investors should also note that emerging markets such as Nigeria are subject to rapid change and that
the information set forth in this Prospectus may become outdated relatively quickly.
Moreover, financial turmoil in any emerging market country tends to adversely affect prices in equity
markets of all emerging market countries as investors move their money to more stable, developed
markets. As has happened in the past, financial problems or an increase in the perceived risks
associated with investing in emerging economies could dampen foreign investment in Nigeria and
adversely affect the Nigerian economy. Thus, even if the Nigerian economy remains relatively stable,
financial turmoil in any emerging market country could result in a decrease in the price of the Bonds.
A. The need to determine the suitability of the investment in line with investors’ objectives
Each potential Investor in the Bonds must determine the suitability of that investment generally in light
of his or her own circumstances. In particular, each potential investor should:
(i) have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the
merits and risks of investing in the Bonds and the information contained in this Prospectus;
(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of his
or her particular financial situation, an investment in the Bonds and the impact such investment
will have on its overall investment portfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Bonds, including where the potential Investor’s currency is not the Nigerian Naira.
(iv) understand thoroughly the terms of the Bonds; and
(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.
C. Change of law.
The conditions of the Bonds are based on Nigerian law in effect as at the date of this Prospectus. No
assurance can be given as to the impact of any possible judicial decision or change to Nigerian law or
administrative practice after the date of issue of the Bonds.
C. Financial turmoil in emerging markets may lead to unstable pricing of the Bonds.
The market price of the Bonds is influenced by economic and market conditions in Nigeria and, to a
varying degree, economic and market conditions in other African and emerging markets generally.
Statement of Indebtedness
Save as disclosed herein, the State had no outstanding debentures, mortgages, loan capital, overdrafts, short
term loans, charges or similar indebtedness or material contingent liabilities other than those arising from the
ordinary course of governance. However, as at June 30, 2009, the total loans and overdraft of the State was
N71,407,537,000.00.
Pursuant to the forgoing, the Joint Solicitors to the Offer are of the opinion that the liability that may accrue to
the State from the cases reviewed by them would not have any material adverse effect on the Offer.
The members of the State’s Executive Council are of the opinion that the aforementioned cases are not likely to
have any material adverse effect on the state and or the Offer.
Material Contracts
• A Vending Agreement dated June 28, 2010 between the Bayelsa State Government on the one part and FBN
Capital, BGL, Capital Asset, Skye Financial, Stanbic IBTC, Sterling Capital, UBA Capital and Vetiva Capital on
the other part by which the latter had agreed to Issue N50,000,000,000 Bayelsa State 13.75% Fixed Rate
Bond 2010/2017 on behalf of the State
• An Underwriting Agreement dated June 28, 2010 between the Bayelsa State Government on the one part
and FBN Capital, BGL, Capital Asset, Skye Financial, Stanbic IBTC, Sterling Capital, UBA and Vetiva Capital
on the other part by which the latter had agreed to underwrite the N50,000,000,000 Bayelsa State 13.75%
Fixed Rate Bond 2010/2017 on a hundred (100%) firm commitment basis.
• A Trust Deed dated June 28, 2010 between the Bayelsa State Government on the one part and First
Trustees Nigeria Limited Skye Trustees Limited and UBA Trustees Limited on the other part by which the
latter had agreed to manage, effect and co-ordinate the N50,000,000,000 Bayelsa State 13.75% Fixed Rate
Bond 2010/2017 on behalf of the State.
• A N50,000,000,000 loan facility from First Bank of Nigeria Plc to the Bayelsa State Government to refinance
its existing facilities with other banks namely Oceanic Bank, ETB, Intercontinental Bank and Bank PHB.
Save as disclosed above, the Issuer has not entered into any contract which may be deemed material in
connection with the issue.
Apart from the relationship between the Attorney General of the State and the Solicitors to the Trustee,
George-Ikoli & Okagbue, there is no other relationship between the Issuer and any of its advisers as at the date
of this Prospectus except in the ordinary course of business.
4. ACCEPTANCE OF TRUST
4.1 By execution hereof, the Trustees have accepted and agreed to be bound by the powers, duties and
obligations of the Trustees specifically set forth herein.
4.2 The Trustees shall have no duty, responsibility or obligation for the issuance of the Bonds or for the
validity or exactness thereof, or of any document relating to such issuance.
4.3 The Trustees shall have no duty, responsibility or obligation for the payment of Bonds except in
accordance with the terms and provisions hereof or any agreement to which they are party, and only to
the extent of the Sinking Fund held in trust by the Trustees for the purpose of such payment.
4.4 Prior to an Event of Default and after the curing or waiving of all Events of Default which may have
occurred, the Trustees shall not be liable except for the performance of such duties as specifically set
down herein.
4.9 Notwithstanding any other provisions hereof, a Trustee shall have no liability for (a) an error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts or (b) action taken or omitted to be taken by it in good faith in
accordance with the lawful direction of the Holders of not less than a majority in principal amount of
Bonds then outstanding.
5.1.1 Pursuant to the provisions of the Law, there is hereby established a Sinking Fund, to be
administered by the Trustees in respect of the Issue. The amounts standing to the credit of the
Sinking Fund from time to time shall be applied to meet the obligations of the Issuer as follows:
(i) Coupon Payments;
(ii) Principal repayment at Maturity or Early Redemption (as the case may be); and
(iii) Trustees’ fees and expenses.
Amounts in the Sinking Fund shall be pledged to the Holders.
5.1.2 The State shall not later than the allotment date cause payments to be made to an account
established by the Trustees titled the Sinking Fund Account. The State shall irrevocably authorize
the Accountant-General of the Federation or any public officer for the time being in charge of the
Distributable Pool of the Consolidated Revenue of the Federation to deduct, as a first charge on
the State’s share of the Federation Account and to place to the credit of the Sinking Fund Account,
the sum of N1,241,107,428.57 (One billion, Two Hundred and Forty-one Million, One Hundred
and Seven Thousand, Four Hundred and Twenty-eight Naira, Fifty-seven Kobo Only) from the
revenue of the State as shown in the schedule set out hereunder from time to time which sum
shall be applied towards the payment of interest and the redemption, at par of the Bond
PROVIDED THAT where the amount being credited to the account is not sufficient to meet interest
and principal repayment due to the bond at any time, the Trustees shall ask the State to increase
the amount being credited to the account.
6.1 Issuance
6.1.1 The Issuer may issue Bonds in accordance with the Offer Documents and to the extent provided by the
Law and the resolution of the Executive Council.
6.2 Terms:
a) Amount of Bonds: The Aggregate Principal Amount of Bonds issued pursuant hereto (the Issue) is N 50
Billion comprising 50 million registered Bonds at a par value of N 1,000 (One Thousand Naira) each.
b) Type of Bonds: Fixed Rate Bonds.
c) Status of Bonds: The Bonds constitute senior and direct obligations of the State. The Bonds are
guaranteed by an ISPO approved by the Federal Ministry of Finance and acknowledged by the
Accountant General of the Federation. The Bonds qualify as securities in which trustees and pension
fund administrators may invest under the Trustees Investment Act Cap. T22 LFN 2004 and the Pension
Reform Act Cap P4 LFN 2004 respectively.
d) Minimum Subscription: The minimum subscription amount for the Bonds is 1,000 and multiples of 100
thereafter.
e) Tenor: (Seven) 7 years.
f) Tax Considerations: The Bonds shall be exempt from all forms of taxation in the Federal Republic of
Nigeria. Accordingly, all payments made to Holders shall be free and clear of withholding, or any
deductions at source or otherwise and/or State and Federal income and capital gains or other taxes.
g) Coupon Payment:
(i) The Coupon shall be payable semi-annually in arrears in equal payments on each Coupon Payment
Date up to and including the Maturity Date. The Coupon Payment Date shall be six months intervals
from the date of allocation of the bond of every year, up till the Maturity date, that is, 7 years from
the Allotment Date.
(ii) The initial coupon shall be paid Six months from .
(iii) The Coupon rate payable on the Bonds shall be 13.75% fixed rate per annum (“Coupon Rate”).
(iv) The Coupon Payment shall be determined as follows:
Coupon Payment = Principal Amount of Bonds x 13.75%
(v) The Trustees shall apply the monies in the Sinking Fund Account for Coupon Payments to the
Holders on the Coupon Payment Dates and repayment of principal on the Maturity Date.
6.3 Redemption
6.3.1 The Aggregate Principal Amount and any Coupon (accrued up to but unpaid as of the Maturity Date)
shall be paid in one bullet on the Maturity Date.
7. REDEMPTION OF BONDS
7.1 The Bonds will be redeemed at their Principal Amount plus accrued but unpaid Coupon on the Maturity
Date.
7.2 The Bondholders will present to the Registrar proper identification/authorisation forms evidencing their
beneficial ownership in the Bonds. Upon the determination and verification of the beneficial ownership,
the Issuer will repay the Principal Amount of the Bonds plus Coupon accrued but unpaid from the last
Coupon Payment Date. The proceeds of such redemption will be transferred to the account indicated by
the Bondholder by the Registrar acting on behalf of the Issuer and the Trustees.
immediately be subject to such pledge as and when received by the Government, without any physical
delivery thereof or any further act.
11.3 Save for the security interest referred to in Clause 11.2 above, it will not create any pledge, lien or other
encumbrance upon, or permit any pledge, lien or other encumbrance to be created on the Pledged
Revenues.
11.4 It will direct the AGS to issue on behalf of the State, an ISPO authorising the AGF to deduct from the
monthly statutory allocations accruing to the State from the Federation Account, such amounts as are
specified by the Trustees as required to be paid into the Sinking Fund, and directing same to be paid
into the Sinking Fund for the purpose of further securing the fulfilment of Government’s obligations with
respect to principal and or coupon payments on the Bonds.
11.7 It shall pay the Trustees such fees as may be agreed between the Parties, and reimburse the Trustees all
reasonable and proper out of pocket costs and expenses as they may incur in connection with the
performance of their duties under this Deed including the costs for convening and holding meetings of
Holders; provided that, for any additional costs which will cause the costs to exceed, in the aggregate,
One Million Naira (N1.0m) in any one year, the Trustees shall seek and obtain the prior written consent
of the Commissioner to incur such costs and expenses.
11.9 Shall ensure that for as long as the Bonds remain outstanding, the Appropriation Law shall make
provisions for its annual debt service obligations under this Deed as a recurrent expenditure payable
from the Consolidated Revenue Fund.
12.3 The Trustees shall have the following duties and responsibilities:
12.3.3 To retain control over the Sinking Fund and keep the monies and Assets derived from the
management of the Sinking Fund separate from all other monies and assets within their control, in
their ordinary course of business;
12.3.4 To advise the Government when contributions to the Sinking Fund will be sufficient with or without
further accumulations of coupon, but without further payments of contributions, to enable the
Government to redeem the Bonds at the time of their maturity; and also to inform the Government
as to when to recommence contributions into the Sinking Fund;
12.3.5 To summon, as and when necessary, meetings of all Holders of the Bonds whereat a Statement of
Affairs on the management of the Sinking Fund shall be presented, and/or any other necessary
business and/or matter shall be presented and determined. A meeting shall be convened by the
giving of at least 28 (twenty eight) clear days written notice to all Holders (specifying the agenda at
the meeting), and the said notice shall also be published in at least two (2) national newspapers.
The procedure and regulations at such a meeting of the Holders shall be in accordance with
Schedule 2 of this Deed.
any such advice, opinion or information may be obtained or sent by letter, facsimile or electronic
mail;
12.4.5 Without prejudice to the right of indemnity conferred by law on trustees, the Trustees and every
attorney, manager, agent or other person appointed by them hereunder shall be entitled to be
indemnified by the Issuer in respect of all liabilities and expenses incurred by them in the
execution of the powers and trusts hereof or of any powers, authorities or discretions vested in
them pursuant to these presents provided that the Trustees have not been grossly negligent or
have acted in default of their powers;
12.4.7 The Trustees shall not be liable for any act pursuant to or under this Deed, save only for any
breach of trust committed by them, provided that nothing contained in this clause shall exempt
the Trustees from or indemnify them against any liability for breach of trust where the Trustees fail
to show the degree of care and diligence required of them, having regard to the provisions hereof
conferring on them any powers, authorities or discretions;
12.4.8 Subject to Clause 11.7 above, the Trustees may employ and pay an agent, whether a solicitor or
other person, to transact or concur in doing all acts required to be done by the Trustees, including
the receipt and payment of money, and any such person shall be entitled to charge and be paid all
usual professional fees and other charges;
12.4.9 In the absence of bad faith and gross negligence on the part of the Trustees, the Trustees may
conclusively rely upon and shall be protected in acting or refraining from acting upon any
document, including but not limited to any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order or other paper or document reasonably believed
by them to be genuine and to have been signed or presented by proper officials of the Issuer
relating to any matter primarily within the knowledge of the Issuer, the Holders or agents or
attorneys of the Holders, as sufficient evidence thereof; provided that in the case of any such
document specifically required to be furnished to the Trustees hereby, the Trustees shall be under
a duty to examine the same to determine whether it conforms to the requirements thereof. The
Trustees shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, or other paper or document submitted to the Trustees; provided however that the Trustees,
in their discretion, may make such further inquiry or investigation into such facts or matters as
they may deem prudent;
12.4.11 Subject to Clause 13.2, the Trustees shall be entitled to assume without enquiry, in the absence of
knowledge by or express notice to them to the contrary, that the Issuer is duly performing and
observing all the covenants and provisions herein contained which are to be performed and
observed by the Issuer and it shall be in the discretion of the Trustees whether to take any action
or proceedings or to enforce the performance thereof, and the Trustees shall not be bound and the
Trustees shall not be bound to declare the Bonds immediately repayable or to take any steps to
enforce payment thereof or any of the provisions of this Deed unless and until in any of such cases
the Trustees are required to do so in writing by the registered Holders of at least three quarters (¾)
of the nominal value of the Bonds or by a Special Resolution passed at a duly convened meeting of
Holders; Provided that the Trustees shall in any case inform the Holders of the happening of any
Event of Default that comes to their knowledge;
12.4.12 The Trustees in the exercise of the powers and discretions vested in them pursuant to this Deed
shall comply with the provisions of the ISA and any other applicable law.
13 EVENTS OF DEFAULT
Each of the following events is hereby declared an “Event of Default” with respect to the Bonds, and
subject to the provisions of this Deed, the principal and coupon payments due to the Holders shall
become immediately payable and the Trustees shall be entitled to take all necessary steps to effect such
payment:
13.1 If payment by the Issuer in respect of any coupon or premium on any Bond shall not be made in full
when same becomes due and payable;
13.2 If payment by the Issuer in respect of the principal of the Bonds shall not be made in full when the same
becomes due and payable, whether at maturity or by proceedings for redemption or otherwise;
13.3 If the Issuer shall fail to observe or perform any other obligation, covenant or agreement on its part as
prescribed herein, for a period of 90 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Issuer by the Trustees, or from which such notice
has been given to the Issuer and the Trustees by Holders of at least 50% in aggregate of the principal
amount of the Bonds still then outstanding; provided however, that if the breach of covenant or
agreement is one which cannot be completely remedied within the 90 days after written notice has been
given, it shall not be an Event of Default with respect to the Bonds as long as the Issuer has taken active
steps within 90 days after written notice has been given to remedy the failure and is to the satisfaction
of the Trustees diligently pursuing such remedy;
13.4 In the event of a Material Adverse Change;
13.5 If by reason of the introduction of, or any change in, any applicable law or regulation or regulatory
requirement, or any change in the interpretation or application thereof, otherwise than by the act of the
State, it becomes unlawful or it is prohibited, for the Issuer to maintain or give effect to any of its
material obligations as contemplated by this Deed.
15.1 Upon the occurrence of the Event of Default specified in Clause 13.1 and 13.2, subject to the terms
hereof, the Trustees shall within six (6) months of such default take immediate steps to ensure that the
AGF deducts from the statutory allocation of the State such amounts as are specified by the Trustees as
required to be paid into the Sinking Fund for the purpose of redeeming any outstanding obligations
hereunder.
15.2 Subject to the provisions of Clause 13 hereof, upon the occurrence and continuance of any of the
Events of Default specified in Clauses 13.3 and 13.4, the Trustees may, or shall upon the written
request of Holders of not less than 10% of the principal amount of the Bonds, together with the due
indemnification of the Trustees to their satisfaction, proceed forthwith to protect and enforce their
rights and the rights of the Holders hereunder, under the ISA and under the Law and the Bonds by such
suits, actions or proceedings, as the Trustees, being advised by counsel, shall deem expedient.
15.3 The Trustees shall also file a notice of any default and remedies being pursued with the SEC within
fifteen (15) days of the occurrence of the Event of Default.
15.4 No Holder shall in any circumstance be entitled to any remedy (whether by way of action, petition,
arbitration or otherwise howsoever) for the recovery of any payment of principal or coupon on the
Bonds unless the Trustees, having become bound to take proceedings in accordance with this Deed,
notify the Holders in writing of their refusal to do so, in which case the Holder may:
15.4.1 take such proceeding in a representative capacity on behalf of himself and, where authorised, other
Holders of not less than 10% of the principal amount of the Bonds, for the recovery of the payments
due on the Bonds; or
15.4.2 take such proceedings in his name for the recovery only of his own portion of the Bonds.
aforesaid and only so long as (a) no Event of Default shall have occurred and be continuing and (b) the
removal of the Trustee shall not have any adverse effect upon the rights and interests of the Holders.
18.3 Where a Trustee gives notice of its resignation as trustee pursuant to Clause 18.1 hereof or in the event
that a Trustee is dissolved or otherwise becomes incapable to act as Trustee or is removed as Trustee
pursuant to Clause 18.2 herein, the Commissioner upon the approval of the Executive Council shall
immediately appoint a successor Trustee and the SEC shall be promptly notified. In such event, the
successor Trustee shall cause notice of its appointment to be issued to the Holders of all Bonds then
outstanding. If the Trustee resigns, the resigning Trustee shall bear the costs of giving such notice. If the
Trustee is removed, is dissolved, or otherwise becomes incapable of acting as trustee, the Government
shall bear the costs of giving such notice.
18.4 Any successor Trustee appointed by the Commissioner shall be a company authorised to carry on trust
business in Nigeria and duly registered with the SEC to provide corporate trust services.
18.5 Every successor Trustee shall execute, acknowledge and deliver to its predecessor and also to the
Government an instrument in writing, accepting such appointment hereunder, and thereupon such
successor Trustee, without further action, shall become fully vested with all the rights, immunities,
powers, trusts, duties and obligations of its predecessor, and such predecessor shall execute and deliver
an instrument transferring to such successor Trustee all the rights, powers and trusts of such
predecessor. The predecessor Trustee shall execute any and all documents necessary or appropriate to
convey all interest it may have to the successor Trustee. The predecessor Trustee shall promptly deliver
all records relating to the trust and copies thereof and communicate all material information it may have
obtained concerning the trust to the successor Trustee and shall duly provide the successor Trustee with
a full and updated statement of affairs and accounts of the trust in respect of each Series of Bonds.
SCHEDULE
PROVISIONS FOR MEETINGS OF THE HOLDERS
1.2 Upon the occurrence of an Event of Default, Holders of at least 10% of the nominal amount of the Bonds
for the time being outstanding shall be entitled to convene a meeting at which a resolution to compel
the Trustees to take steps against the Issuer will be passed.
2. Notice of Meetings
2.1 A meeting of the Holders may be called by giving not less than twenty-eight (28) days’ notice in writing.
2.2 A meeting may be called after giving shorter notice than that specified in paragraph 2.1 above if consent
is accorded thereto by Holders holding not less than seventy-five per cent (75%) of the nominal amount
of the Bonds for the time being outstanding.
3.3 The accidental omission to give notice to or the non-receipt of notice by any Holder or other person to
whom it should be given shall not invalidate the proceedings of the meeting.
5. Chairman of Meeting
5.1 The Trustees or such other person nominated by the Trustees shall be entitled to take the chair at every
meeting and if no such nomination is made or if at any meeting the Trustees or the person nominated
shall not be present within thirty (30) minutes after the time appointed for holding the meeting the
Holders personally present shall on a show of hands elect one of themselves to be the Chairman thereof.
10. Votes
On a show of hands, every Holder who (being an individual) is present in person or by proxy or (being a
body corporate) is present by its duly authorised representative shall have one (1) vote, and on a poll
every Holder who is present in person or by proxy shall have one (1) vote in respect of every unit of the
Debt Security of which he is the holder.
23. Minutes
Minutes of all resolutions and proceedings at such meeting as aforesaid shall be made and duly entered
in the books to be provided from time to time for that purpose by the Trustee sat the expense of the
Issuer, and every such minutes as aforesaid if signed by the Chairman of the meeting at which such
resolutions were passed or proceedings had or by the Chairman of the next succeeding meeting of the
Holders shall be conclusive evidence of the matters therein contained, and until the contrary is proved
every such meeting or proceedings in respect of which minutes have been signed as aforesaid shall be
deemed to have been duly held and convened, and all resolutions passed thereat or proceedings taken
to have been duly passed and taken.
Representatives of the State Executive Council: His Excellency, Chief Timipre Sylva
Hon. Gideon Ekeuwei
Mr. Obegha Julius Oworibo
Dr. Silva Opuala-Charles
Dr. Azipabu Godbless Eruani
Mrs. Josephine Ezonbodor
Engr. Emmanuel Frank-Opigo
Hon. Maxwell Oko
Hon. Francis Kuroghoekegha
Mrs. Victoria P. Denenu
Chief Diekivie B. Ikiogha
Hon. Waripam-owei Dudafa
Mr. Ibomo Kenigua Robert
Chief Whisky E. Ayakeme
Chief Asara A. Asara
Elder Bethel Amabebe
Hon. Bekeakpo Etifa
Ms. Dora Oru Ebapregha
Hon. John D. Iyekoroghe
Chief Benneth Owei-Zala
Mr. Stephen Ogullah
The following documents will be available for inspection throughout the life of the Bond at the principal offices
of the Issuing Houses and from the State Ministry of Finance, Yenogoa, Bayelsa State.
• The Resolution passed by the Bayelsa State House of Assembly pursuant to the Enabling Law,
authorizing the monthly deduction of N1,241,107,428.57 from the Statutory Allocation by the
Accountant General of the Federation for debt service throughout the tenor of the Bond as published in
the Official Gazette of the State;
• The Resolution of the Bayelsa State Executive Council authorizing the Bond Issue, published in the
Official Gazette of the State;
• The Letter of Approval dated May 5, 2010, in respect of the ISPO issued by the Honourable Minister for
Finance;
• Presidential Tax waiver on all categories of Bonds, Short Term Federal Government Securities and
Reduction in Stamp Duties published in the Guardian Newspaper of March 29, 2010;
• A Vending Agreement dated June 28, 2010 between the Bayelsa State Government on the one part and
the Issuing Houses on the other part;
• An Underwriting Agreement dated June 28, 2010 between the Bayelsa State Government on the one
part and the underwriters on the other part;
• The Trust Deed dated June 28, 2010 between Bayelsa State Government on the one part and First
Trustees Nigeria Limited, Skye Trustees Limited and UBA Trustees Limited on the other part;
• The audited financial statements of Bayelsa State for each of the five years ended 31st December 2004,
2005, 2006, 2008 and half year to 30th June 2009;
• The report of Akintola Williams Deloitte on the State’s Revenue and Expenditure Statements for the five
years ended December 31, 2008, half year to 30th June 2009 and Revenue and Expenditure Forecast for
seven years ending December 2017;
• The Feasibility Reports commissioned by the State in connection with the projects to be funded by the
proceeds of the Issue;
• The Schedule of Claims & Litigations involving the State, together with the opinion of (Joint Solicitors to
the Issue) prepared in connection therewith;
• The Prospectus dated June 28, 2010 issued in respect of the N50,000,000,000 Bayelsa State 13.75%
Fixed Rate 7year Bond Issue 2010/2017;
• The Letter from SEC confirming the registration of the Bond Issue;
• The Rating Report issued by Agusto & Co Limited for the Bond Issue.
• A N50,000,000,000 loan facility from First Bank of Nigeria Plc to the Bayelsa State Government to
refinance its existing facilities with other banks namely Oceanic Bank, ETB, Intercontinental Bank and
Bank PHB.
1. Application
The general investing public is hereby invited to apply for the Bonds through any of the Receiving Agents
listed in this Prospectus.
1.1 Application for the Bonds now being offered must be made in accordance with the instructions set
out on the back of the Application Form. Care must be taken to follow these instructions, as
applications which do not comply will be rejected.
1.2 The Application List for the Bonds now being offered opens on June 30, 2010 and will close June 30,
2010. Applications must be for a minimum of 1000 registered Bonds of N1,000.00 each,
representing an aggregate value of N1,000,000.00 and in integral multiples of 100 registered Bonds
thereafter, representing an aggregate value of N100,000 each. The number of registered Bonds for
which application is made and the value of the cheque or bank draft attached should be entered in
the space provided in the attached Application Form.
1.3 The subscription currency for the Issue is the Nigerian Naira (N). Foreign currency subscriptions will
be processed at the applicable foreign exchange rate determined at the auction of the CBN as
conducted from time to time.
1.4 The applicant should make only one application, whether in his own name or in the name of a
nominee. Multiple or suspected multiple applications will be rejected.
1.5 Applicants should complete the Application Form as appropriate. A corporate applicant should affix
its seal in the box provided for this purpose and state its incorporation (RC) Number or in the case of
a corporate foreign subscriber, it’s appropriate identification number in the jurisdiction in which it is
constituted.
1.6 All applicants are required to indicate their bank account details in the space provided on the
Application Form for the purposes of Coupon and Principal e-payments.
1.7 Each duly completed Application should be forwarded ONLY to one of the Receiving Agents listed in
this Prospectus, together with the cheque or bank draft for the aggregate value of Bonds being
subscribed, crossed “BAYELSA STATE GOVERNMENT BONDS 2010/2017” and made payable to the
Receiving Agent to which the application is addressed. All bank commissions and transfer charges
must be prepaid by the applicant. All cheques and bank drafts will be presented upon receipt and all
applications in respect of which cheques or bank drafts are returned unpaid will be rejected.
2. Allotment
The State Executive Council and the Issuing Houses reserve the right to accept or reject any application in
whole or in part for not complying with the terms and conditions of the Issue. All irregular or suspected
multiple applications will be rejected. The allotment proposal will be subject to the clearance of the
Commission. Certificates in respect of allotted Bonds will be sent by registered post not later than 15 (fifteen)
Business Days from the Allotment Date. Any investor who prefers the issue of the Bonds in dematerialised
form should specify the details of his/her stockbroking firm, CHN and CSCS account in the space provided on
the Application Form.
3. Application Monies
All application monies will be retained in separate interest-yielding bank accounts with the Receiving Banks
pending allotment. If any application is not accepted, or is accepted for fewer Bonds than the number applied
for, a crossed cheque for the full amount or the balance of the amount paid (as the case may be) plus interest
will be returned by registered post within 5 (five) Business Days of allotment by the Registrar. Where monies
are not sent within the stipulated 5 Business Days, accrued interest will be paid to the affected applicants at
the prevailing Monetary Policy Rate plus a margin of 5% i.e. MPR +5%.
The Prospectuses incorporating Application Forms may be obtained free of charge from any of the following
SEC-registered Receiving Agents, to whom brokerage commission of 0.75% will be paid on the value of Bonds
allotted in respect of applications bearing their official stamps.
The Issuing Houses cannot accept responsibility for the conduct of any of the institutions listed below. Investors are
therefore advised to conduct their own independent enquiries before choosing an agent to act on their behalf. Evidence of
lodgment of funds at any of the Receiving Agents listed below, in the absence of corresponding evidence of receipt by the
Issuing Houses, cannot give rise to a liability on the part of the Issuing Houses under any circumstances.
Adamawa Securities Ltd De-Lords Securities Ltd International Capital Securities Ltd Professional Stockbroker Ltd
Adonai Stockbrokers Ltd Denham Management Ltd International Standard Securities Ltd Profund Securities Ltd
AIL Securities Ltd Dependable Securities Ltd Intercontinental Capital Markets Ltd Prominent Securities Ltd
Alangrange Securities Ltd Dominion Trust Ltd Interstate Securities Ltd PSL Limited
Allbond Investments Ltd Dynamic Portfolios Ltd Investors & Trust Co Ltd P.S.I. Securities Ltd
Alltrade Securities Ltd Emerging Capital Ltd Jamkol Investments Ltd Rainbow Securities & Investment Co.
Alliance Capital Management Ltd Empire Securities Ltd Jenkins Investment Ltd Ltd
AMYN Investments Ltd Euro Comm Securities Ltd Kinley Securities Ltd Riverside Trust Limited
Asset & Resource Management Ltd Express Portfolio Services Ltd Kundila Finance Services Ltd Reward Investments & Services Ltd
Anchoria Investment & Securities Ltd ESL Asset Management Limited LB Securities Ltd Rowet Capital Management Ltd
Apex Securities Ltd Falcon Securities Ltd Lead Securities & Investment Ltd Royal Crest Finance Ltd
APT Securities & Fund Ltd FBN Securities Limited Lighthouse Asset Management Ltd Sanbros Trust & Securities Ltd
Aquila Capital Limited F & C Securities Ltd Lion Stockbrokers Ltd Securities Solutions Ltd
Bacad Finance & Investment Co Ltd Fidelity Union Securities Ltd Lynac Securities Ltd Security Swaps Ltd
Beaver Securities Ltd Fidelity Finance Ltd Magnartis Fin & Inv Ltd Shallom Investment & Securities Ltd
Bestworth Assets & Trust Ltd Financial Derivatives Ltd Mainland Trust Ltd Sigma Securities Ltd
BFCL Assets & Investment Ltd Financial Equities Ltd Maninvest Securities Ltd Silver Financial Services Ltd
BGL Securities Ltd Financial Trust Co Ltd Marina Securities Ltd Solid-Rock Securities & Investment Ltd
BIC Securities Ltd Finmal Finance Company Ltd Marriot Securities Limited Stanbic Equities Nigeria Ltd
BSD Securities Ltd First Equity Securities Ltd MBC Securities Ltd Summa Guaranty & Trust Co. Ltd
Capital Assets Ltd First Stockbrokers Ltd Mega Equities Ltd Summit Finance Company Ltd
Capital Trust Brokers Folu Securities Ltd Mercov Securities Ltd Support Services Ltd
Capital Express Securities Ltd Foresight Securities & Investment Ltd Molten Trust Ltd Thomas Kingsley Securities Ltd
Century Securities Ltd Forte Asset Management Ltd Mutual Alliance Investment & Securities Ltd Tiddo Universal Securities & Finance Ltd
Calyx Securities Ltd Forthright Securities & Investments Ltd Midas Stockbrokers Ltd Tomil Trusts Ltd
Camry Securities Limited Fountain Securities Ltd Midlands Investment & Trust Co. Ltd Topmost Finance & Investment s Ltd
Cash Craft Asset Management Ltd. Future View Financial Services Ltd Mission Securities Ltd TRW Stockbrokers Ltd
Capital Bancorp Ltd Genesis Securities Ltd. Morgan Trust & Asset Management Ltd Transglobe Investment & Finance Co Ltd
Cashville Investments & Securities Ltd. Gidauniya Investment & Securities Mountain Investment & Securities Ltd Trade Link Finance & Securities Ltd
Centre-Point Investment Ltd Ltd Newdevco Finance Securities Ltd Tropics Securities Ltd
City Investment Management Ltd Global Capital Market Ltd Niche Securities Ltd Trust and Financial Services Ltd
City Securities Ltd Golden Securities Ltd Nigerian Stockbrokers Ltd Trusthouse Investment Ltd
City-Code Trust & Investments Ltd Great Africa Trust Ltd Networth Securities & Finance Ltd Trust Yields Securities Ltd
Consolidated Investment Ltd Greenwich Trust Ltd Nova Finance & Securities Ltd UBA Securities Ltd
Cooper Flemming Stockbrokers Ltd GTI Capital Ltd Options Securities Ltd UNEX Securities & Investment Ltd
Core Trust & Investment Ltd Hedge Securities & Investments Ltd OMF Securities & Finance Ltd Union Stockbrokers Ltd
Crane Securities Ltd Heritage Investment & Securities Ltd Partnership Investment Co. Ltd Valmon Securities Ltd
Crossworld Securities Ltd Horizon Stockbrokers Ltd Pine Fields Investment Services Ltd Valueline Securities & Investment Ltd
Clearview Investment Co Ltd IBTC Asset Management Ltd PIPC Securities Ltd Vetiva Capital Management Ltd
Counters Trust Securities Ltd IBN Securities Ltd Peak Securities Ltd Vision Trust & Investments Ltd
CSL Stockbrokers Ltd ICON Stockbroker Ltd Perfection Securities & Investment Ltd WSTC Financial Services Ltd
DakaL Securities Ltd IMB Morgan Plc PIPC Securities Ltd Yobe Investment Co. Ltd
DBSL Securities Ltd Indemnity Finance Ltd Platinum Capital Ltd Zenith Securities Ltd
De-canon Investments Ltd Independent Securities Ltd Zuma Securities Ltd
Integrated Trust & Investments Ltd
Intercontinental Securities Ltd
GUIDE TO APPLICATION
Number of units applied for Amount payable
1000 Minimum N1Million
Subsequent multiples of 100 N 100,000
1. Applications should be made on the Application Form. Applications made on photocopies of the
Application Form will not be accepted.
2. Applications must not be for less than the minimum number of Bonds stated on the Application
Form. Applications for more than the minimum number of Bonds must be in the multiples stated on
the Application Form. The number of Bonds for which an application is made and the amount of the
cheque or bank draft attached should be entered in the boxes provided.
3. The Application Form when completed should be lodged with any of the Receiving Agents listed on
page 93. Applications must be accompanied by a cheque or bank draft made payable to the receiving
agent to whom, the application is submitted, for the full amount payable on application. The cheque
or draft must be drawn on a bank and crossed “BAYELSA STATE GOVERNMENT BONDS 2010/2017”.
All bank commissions and transfer charges must be prepaid by the applicant. All cheques and drafts
will be presented upon receipt and all applications in respect of which cheques are returned unpaid
will be rejected.
4. The applicant should make only one application, whether in his own name or in the name of a
nominee. Multiple or suspected multiple applications will be rejected.
5. Applications from corporate bodies must bear the corporate body’s seal and be completed under the
hand of a duly authorised official.
6. Applications from a Pension or Provident Fund must be in the name of each individual trustee unless
the trustee is a limited liability company.
7. The applicant should not print his signature. If he is unable to sign in the normal manner he should
be treated for the purpose of this Offer as an illiterate and his right thumb print should be clearly
impressed on the Application Form.
Application Form