Lagos State Bond 2026: ₦200bn Offer, Coupon and Minimum

Lagos State is raising up to ₦200 billion through a 10-year Series 5 Fixed Rate Bond that opened on Friday, 9 October 2026 and closes on Friday, 16 October 2026. The indicative coupon is 16.50% to 16.75% a year, the final rate will be set by book building, and the minimum subscription is ₦5 million. Here is what the terms mean in practice, where the money goes, and the trade-offs to understand.

Lagos Series 5 bond at a glance

These terms are as reported by Nairametrics and Tax Nigeria from the offer details.

Where the ₦200 billion will go

According to the proposed allocation:

• ₦122.16 billion (61.1%) for the Lagos Blue Line rail, including the Mile 2 to Trade Fair section and stations at Festac, Alakija and Trade Fair.
• ₦48.87 billion for health projects, including the New Massey Street Children's Hospital and the 280-bed Ojo General Hospital.
• ₦24.43 billion for the Omu Creek project, a 3.915-kilometre road with a 600-metre bridge.
• ₦4.54 billion for issue costs.

This follows the state's ₦244.82 billion dual bond in November 2025, made up of a ₦230 billion 10-year bond at 16.25% and a ₦14.82 billion five-year green bond at 16%.

How the money flows back to investors

Coupon income

At the guidance range, a ₦5 million holding would earn gross interest of about ₦825,000 to ₦837,500 a year, paid in two instalments, for as long as the full principal is outstanding. That figure is before any applicable tax, and the offer says applicable taxes apply unless an exemption covers them.

Amortising principal

This is not a bond that pays all your money back at the end. After three years, Lagos starts returning principal every six months over the remaining seven years. As your balance falls, the interest you receive in naira falls too. That means you need a plan for reinvesting the cash that comes back.

Repayment support

Repayment is backed by contributions from the state's Consolidated Debt Service Account and deductions from federal allocations through an Irrevocable Standing Payment Order, subject to final approval. The money goes into a sinking fund run by trustees. Monthly funding is projected at ₦3.40 billion for the first three years and ₦4.57 billion after that.

How it compares with an FGN bond

The fair benchmark is a Federal Government bond of similar length. At the 14 September 2026 auction, the 10-year FGN September 2036 bond cleared at 16.79%, according to Nairametrics. Lagos' guidance of 16.50% to 16.75% is therefore 4 to 29 basis points below that level.

In plain words, on these numbers investors are not being paid extra for lending to a state rather than to the Federal Government. Things that can still tip the comparison:

• The final coupon. Book building could land anywhere in the range, or the market could move by 16 October.
• Tax. Check how each bond is taxed in your situation before comparing headline rates.
• Liquidity. FGN bonds usually trade more often, so they are easier to sell before maturity.
• The call option. Lagos can repay at par after five years. If rates fall, it may do exactly that and refinance more cheaply, leaving investors to reinvest at lower yields.

The rate backdrop

The CBN cut its Monetary Policy Rate from 26.5% to 23% in September 2026. If rates keep falling, a fixed coupon locked in now could look good later, and bond prices tend to rise when yields fall. If rates rise, the opposite happens.

The state's finances

Nairametrics' review of the audited 2025 accounts shows total operating revenue, including grants, up 15.5% to ₦2.68 trillion, and internally generated revenue up 19.7% to ₦1.85 trillion. Year-end cash rose 27.1% to ₦540.60 billion. Against that, public debt rose 9.5% to ₦3.07 trillion at December 2025, and ₦1.91 trillion of it, about 62%, was external. A weaker naira would raise the cost of that foreign debt.

What this means for investors

The Lagos bond is a large, rated, fixed-income option from the state that is Nigeria's commercial hub, but the ₦5 million minimum puts it out of reach of most retail savers directly. Smaller investors usually get bond exposure through fixed income mutual funds or FGN Savings Bonds instead. For those who can meet the minimum, the useful questions are simple: what is the final coupon, how does it compare with FGN yields on the day, how is it taxed for you, and are you comfortable with the five-year call and the amortising repayments?

This is for information only and is not investment advice.

FAQ

When does the Lagos State bond offer close?

The Series 5 offer opened on 9 October 2026 and is scheduled to close on Friday, 16 October 2026.

What is the minimum investment in the Lagos State bond?

The minimum is ₦5 million, which is 5,000 units at ₦1,000 each. Extra amounts are in multiples of ₦1,000.

Is the Lagos bond better than an FGN bond?

Neither is better for everyone. The Lagos guidance is slightly below the 16.79% the 10-year FGN bond cleared at in September, and it has an early-repayment option. FGN bonds are usually more liquid. Compare the final terms, tax and your own needs.

Sources

• Nairametrics, "Lagos launches up to N200 billion 10-year bond: Key takeaways for investors" (10 Oct 2026): https://nairametrics.com/2026/10/10/lagos-launches-up-to-n200-billion-10-year-bond-key-takeaways-for-investors/
• Tax Nigeria, "Lagos State opens N200bn 10-year bond offer with 16.50%–16.75% coupon guidance": https://www.taxnigeria.com/news/lagos-state-opens-n200bn-10-year-bond-offer-with-16-50-16-75-coupon-guidance
• Marketforces Africa, "Lagos Opens N200bn Bond For Subscription At 16.75%" (9 Oct 2026): https://dmarketforces.com/lagos-opens-n200bn-bond-for-subscription-at-16-75/
• FMDQ Securities Exchange (bond listings and data): https://fmdqgroup.com/