N4.85bn Default: VisionScape Bond Wasn’t Subject To Prior Review, Approval- SEC Nigeria

In what a seem some sort of contradictory stance, the Securities & Exchange Commission (SEC), on Friday assured that there is no cause for alarm over news report regarding the default in repayment on N4.85bn Visionscape Bond and its role in the transaction.
The transaction, according to the commission’s management in a statement, “was therefore not subject to the prior review and approval of the Commission and does not fall within its regulatory preview, being an issuance by a private company, it was not offered to the public, but to qualified investors by private placement.”

Proshare Nigeria had broken the story that on March 7, 2019 the Lagos State Government was in breach of the terms of the 15.75% Series 1, Tranche B Secured Rate Medium Term Note due in 2022 and Issued by a private company, Municipality Waste Management Contractors Limited.
Payment for the due incomes to investors in the Fixed Interest Rate Medium Term Note which ought to be in nine equal payments spanning four and half years were yet to be made.

Though issued by MWMCL, a company promoted by Visionscape Sanitations Solutions Limited, the bond is backed by an Irrevocable Standing Payment Order (ISPO) issued by the Lagos State Executive Council at its meeting on March 21, 2017, to secure the financing structure by charging it on the State’s Internally Generated Revenue account/ Environmental Trust Fund.
But in another breadth, the management of SEC Nigeria restated commitment to “investor protection and ensuring an efficient, fair and transparent capital market.”
The bond, part of the N50bn Medium Term Note Programme to mobilize assets for residential and general waste collection under the Cleaner Lagos Initiative of the Lagos State Ministry of Environment.

In what may require some explanations going forward, the commission noted that “the Bond was not certified as a Green Bond as portrayed by the media,” as if only subscribers to green bonds would ordinarily enjoy regulatory protection.
Recall that the bond, with a nominal face value of N1, 000 per unit, opened between February 26 and 28, 2018, with price 100% of par value and promised a coupon of 15.75% or N157.50 per unit.

While the tenor is four and a half years, to be repaid in 9 equal semi-annual installments; payments are to be made on March 5 and September 5 of each year in arrears up to and including the Maturity Date, with September 5, 2022 as maturity date.
The Note was assigned ‘A+’ Rating by Rating Agency Agusto & Co and ‘A’ Rating by GCR (formerly known as Duff & Phelps).

https://investdata.com.ng/2019/03/n4-85bn-default-visionscape-bond-wasnt-subject-to-prior-review-approval-sec-nigeria/?fbclid=IwAR3HRCgR-sQu7_RKvp54BZwMJ2mNeovgij5G5ogAy0MBglF14Vzfy0KHjh0