KOGI STATE GOVERNMENT OF NIGERIA N20 BILLION BOND … · BB (DataPro Limited) 22....

KOGI STATE GOVERNMENT OF NIGERIA

N5 BILLION 15% SERIES 1 BONDS DUE DECEMBER 2020

N20 BILLION BOND ISSUANCE PROGRAMME

An application has been made to list the Bonds on the Nigerian Stock Exchange This Pricing Supplement/Supplementary Shelf Prospectus is issued by the Kogi State Government of Nigeria in connection with the issuance of Series 1 Bonds under the N20 Billion Bond Issuance Programme established by the Kogi State Government of Nigeria (the “Issuer”). To the extent that there is any conflict or inconsistency between the contents of this Pricing Supplement/Supplementary Shelf Prospectus and the Shelf Prospectus, the provisions of this Pricing Supplement/Supplementary Shelf Prospectus shall prevail. This Pricing Supplement/Supplementary Shelf Prospectus may be used to offer and sell the Bonds only if accompanied by and read in conjunction with the Shelf Prospectus. Copies of the Shelf Prospectus can be obtained from the Issuing Houses/Book Runners. This registration of this Preliminary Pricing Supplement/Supplementary Shelf Prospectus shall not be taken to indicate that the Commission endorses or recommends the Securities or assumes responsibility for the correctness of any statements made or opinions or reports expressed in the Pricing Supplement/Supplementary Shelf Prospectus. No Securities will be allotted or issued on the basis of the Shelf Prospectus read together with this Pricing Supplement/Supplementary Shelf Prospectus later than two years after the date of the issue of the Shelf Prospectus. This Pricing Supplement/Supplementary Shelf Prospectus contains particulars in compliance with the requirements of the Commission for the purpose of giving information with regard to the Securities being issued hereunder (the “Series 1 Bonds” or the “Bonds”). The Issuer, it’s Executive Council and Issuing Houses accept full responsibility for the accuracy of the information contained in this Pricing Supplement/Supplementary. The Issuer declares that having taken reasonable care to ensure that such is the case, the information contained in this Pricing Supplement/Supplementary Shelf Prospectus is, to the best of its knowledge, in accordance with the facts and does not omit anything likely to affect the import of such information and that save as disclosed herein, no other significant new factor, material mistake or inaccuracy relating to the information included in the Shelf Prospectus has arisen or has been noted, as the case may be, since the publication of the Shelf Prospectus. The statements made in this paragraph are without prejudice to the provisions of Section 85 (1) of the Investment & Securities Act No. 29 2007 (Civil Liability for Mis-statements in Prospectus). Further, the material facts contained herein are true and accurate in all material respects and the Issuer confirms that, having made all reasonable enquiries, to the best of its knowledge and belief, there are no material facts, the omission of which would make any statement contained herein misleading or untrue.

THIS PROSPECTUS IS DATED DECEMBER 31 2013

LEAD ISSUING HOUSE AND LEAD BOOK RUNNER

JOINT ISSUING HOUSES / BOOK RUNNERS

TABLE OF CONTENTS

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PRICING SUPPLEMENT/SUPPLEMENTARY SHELF PROSPECTUS ............................................................................. 3

INDICATIVE TRANSACTION TIMELINE ......................................................................................................................... 9

DECLARATION BY THE ISSUER ....................................................................................................................................... 10

UTILIZATION OF PROCEEDS ............................................................................................................................................ 11

EXTRACTS OF THE AGUSTO & CO RATING REPORT ................................................................................................ 14

EXTRACTS OF THE DATAPRO RATING REPORT ........................................................................................................ 15

HISTORICAL FINANCIAL INFORMATION – FIVE YEAR FINANCIAL INFORMATION ...................................... 16

REPORTING ACCOUNTANTS REPORT ON HISTORICALS ................................................................................................................. 16 STATEMENT OF ACCOUNTING POLICIES ....................................................................................................................................... 17 STATEMENT OF CONSOLIDATED REVENUE FUND ......................................................................................................................... 19 STATEMENT OF CAPITAL DEVELOPMENT FUND ........................................................................................................................... 20 STATEMENT OF CASH FLOWS ........................................................................................................................................................ 21 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................................................................... 22

STATUTORY AND GENERAL INFORMATION .............................................................................................................. 28

STATEMENT OF INDEBTEDNESS ..................................................................................................................................................... 28 CLAIMS, LITIGATIONS & DISPUTES ................................................................................................................................................ 28 MATERIAL CONTRACTS ................................................................................................................................................................. 28 REMITTANCE TO THE SINKING FUND .......................................................................................................................................... 29 DOCUMENTS AVAILABLE FOR INSPECTION .................................................................................................................................. 30 RELATIONSHIP BETWEEN THE STATE AND ADVISERS .................................................................................................................. 30 COST AND EXPENSES ...................................................................................................................................................................... 30

PROCEDURE FOR APPLICATION AND ALLOCATION/ALLOTMENT ..................................................................... 31

APPLICATION ................................................................................................................................................................................. 31 PAYMENT INSTRUCTIONS .............................................................................................................................................................. 32 ALLOCATION/ALLOTMENT ............................................................................................................................................................ 32 DETAILS OF BANK ACCOUNTS ....................................................................................................................................................... 32

COMMITMENT FORM ......................................................................................................................................................... 33

PRICING SUPPLEMENT/SUPPLEMENTARY SHELF PROSPECTUS

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Pricing Supplement/Supplementary Shelf Prospectus

This Pricing Supplement/Supplementary Shelf Prospectus is issued for purposes of providing details of the Series 1 Bond Issuance under the N20,000,000,000 Bond Issuance Programme being undertaken by the Kogi State Government of Nigeria (“Kogi State” or “the Issuer”) and contains the specific terms of the Series 1 Bonds that are being issued hereunder. This Pricing Supplement/Supplementary Shelf Prospectus supplements the terms and conditions in, and incorporates by reference, the Shelf Prospectus dated December 31, 2013 and all documents incorporated therein (“the Prospectus”), and must be read in conjunction with the Prospectus. The terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions set forth in the Prospectus. In the event of any inconsistency between the terms contained in the Pricing Supplement and the terms of the Prospectus, this Pricing Supplement will prevail for the purposes of the Series 1 Bonds.

SUMMARY OF BOND ISSUANCE 1. Issuer: Kogi State Government

2. Series Number: 1

3. Issue Size: Up to N5 Billion (Five Billion Naira)

4. Par Value: N1,000 (One Thousand Naira)

5. Issue Price: At par

6. Gross Proceeds: N5 Billion

7. Net Proceeds: N4.8 Billion

8. Units of Sale: Minimum subscription of 10,000 units and multiples of 5,000 units thereafter

9. Tenor: Seven (7) years

10. Issue Date: 31 December 2013

11. Bond Rating: A- (Agusto & Co.)

BBB+ (DataPro Limited)

12. Maturity Date: 31 December 2013

13. Coupon Basis: Fixed Rate

14. Coupon Rate: 15% per annum

15. Coupon Frequency: Semi-annual and payable in arrears on June and December of each year up to and including the Maturity Date

16. Day Count Convention:

Modified following business day

17. Day Count Fraction: Actual/Actual

18. Listing: An application has been made to the Council of The Nigerian Stock Exchange for the admission of the Bonds to the Daily Official List of the Exchange.

19. Method of Distribution:

Offer for Subscription by way of Book Building. The Coupon will be determined following the bid closing date (the date on which the Book Runners stop accepting Bids


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for the Issue), at the conclusion of the Book Build.

20. Qualified Investors: The Investors that are permitted to participate in this Book Building are High Net worth Individuals and Qualified Institutional investors including Fund Managers, Insurance Companies, Unit Trusts, Multilateral and Bi-lateral Institutions, Registered and/or Verifiable Hedge Funds, Market Makers, Staff schemes, Trustees, Custodians and Stock broking firms as stipulated by Rule 321 of the Rules of the Securities & Exchange Commission. Retail Investors are exempted from participating in this offer.

21. Issuer Rating: Bb+ (Agusto & Co.) BB (DataPro Limited)

22. Redemption/Payment Basis:

Bullet repayment of Principal on the Maturity Date.

23. Utilization of Proceeds: The estimated net issue proceeds of N4,803,148,800 will be utilized to finance key infrastructure projects in the State. Please refer to page 11 for the full breakdown of the use of proceeds.

24. Summary of Claims and Litigations:

The review of the Solicitors to the Issue with respect to the claims and litigations against the State Government reveals that there are fifty-three (53) civil ligation matters pending against the State as at 22 October 2013. The claims in these cases give rise to a potential liability of N309,417,547.41 (Three Hundred and Nine Million, Four Hundred and Seventeen Thousand, Five Hundred and Forty-Seven Naira, Forty-One Kobo). The Solicitors are of the opinion that the litigations have arisen from the usual course of the business of governance and will have no adverse consequences for the proposed Bond Issue.

25. Governing Law: The Laws of the Federal Republic of Nigeria

26.

Security Trust Structure: A Sinking Fund will be established and funded from the Issuer’s statutory allocation by way of an Irrevocable Standing Payment Order (“ISPO”) and shall be independently administered by the Trustees. Lagos State has obtained an Irrevocable Standing Payment Order in the sum of N124.1 million for purposes of the interest and principal repayment obligations under the Bond. The Bonds shall be further secured by a charge on the Debt Service Reserve Fund (“DSRF”) funded from the State’s monthly Internally Generated Revenue (“IGR”). The portion that will be funded to the DSRF shall be proposed by the Debt Management Office (“DMO”) of the State and approved by the House of Assembly, and may be up to 30% of the State’s monthly IGR.

27. Final Redemption Amount:

N5 Billion

28. Status of the Bonds: The Bonds shall constitute secured, direct, unconditional, general and irrevocable obligations of the Issuer, backed by the ISPO, and shall rank pari passu among themselves in all respects without discrimination any preference whatsoever. Pursuant to the Personal Income Tax (Amendment) Act 2011, the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order 2011, and the Value Added Tax (Exemption of Proceeds of the Disposal of Government and Corporate Securities) Order 2011, the Bonds are exempted from taxation in Nigeria. As such, all payments made to Bondholders shall be free and clear of all Taxes with no deduction made whatsoever at source.


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29. Sinking Fund: A Sinking Fund will be created in accordance with the provisions of the Enabling Law and the ISA. The Sinking Fund shall be principally funded from the Statutory Allocation by way of the ISPO and shall be administered solely by the Trustees.

30. Fee Consideration: Registration, transfer, coupon interest payments, principal repayment, issue of certificates of title and certifications of transfers of bonds will be made free of any fees, duty, charges, deductions or levy, except to the extent required by law.

31. Tax Considerations: Pursuant to the Personal Income Tax (Amendment) Act 2011, the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order 2011 and the Value Added Tax (Exemption of proceeds of the Disposal of Government and Corporate Securities) Order 2011, the Bonds are exempt from taxation in Nigeria. As such, all payments made to Bondholders shall be free and clear of Withholding, State and Federal Income and Capital Gains Taxes with no deductions whatsoever being made at source.

32. Delivery:

Investors’ respective CSCS accounts will be credited electronically upon allotment. Each Investor is required to provide a CSCS account number and a Clearing House Number (“CHN”) on the Commitment Form.

33. Bonds Settlement: Bond purchases will be settled by electronic funds transfers through CBN’s Inter-bank Funds Transfer System (“CIBFTS”), Nigerian Inter-bank System Electronic Transfer (“NEFT”) or Real Time Gross Settlement System (“RTGS”).

34. Closure of Register Section 236 of the Investment & Securities Act 2007 stipulates that closure of the register of bondholders at 21 days immediately preceding the date on which a coupon falls due. Furthermore, no transfers of bonds are registerable during the closure period. Accordingly, the Register of bondholders will be closed for the 21 days preceding each Coupon Payment Date.

35. Currency of Payment: The Bonds shall be denominated in Nigerian Naira.

36. Liquidity Status: The Bonds are eligible for the conferment of liquid asset status by the Central Bank of Nigeria. An application shall be submitted to the CBN in this respect upon the issuance of the Bonds.

OPERATIONAL INFORMATION

37. Names of Book Runners:

Lead Issuing House / Book Runner

Afrinvest (West Africa) Limited Joint Issuing Houses / Book Runners

BGL Plc Greenwich Trust Limited Radix Capital Partners Limited Sterling Capital Markets Limited

38. Date of Delivery December 31 2013

39. Registrar: DataMax Registrars Limited


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40. Trustees: Mainstreet Bank Trustees & Asset Management Co. Limited Skye Trustees Limited UBA Trustees Limited

Union Trustees Limited

41. Other Parties: Representatives of the State Executive Council

His Excellency, Captain Idris I. Wada Governor and Chairman, State Executive Council

Mr. Yomi Awoniyi Deputy Governor

Prof. Olugbemiro Jegede Secretary to the State Government

Mr. Joe Adojo Abrahams (SAN) Honourable Commissioner for Justice & Attorney General

Mr. Zakari A. Alfa Honourable Commissioner for Finance and Economic Development

Dr. Olufemi Bolarin Honourable Commissioner for Agriculture

Mr. Abdulrahaman Wuya Honourable Commissioner for Environment & Natural Resources

Mrs. Patience Memuna Mameh Honourable Commissioner for Women Affairs and Social Development

Mr. Stephen Shaibu Mayaki Honourable Commissioner for Lands, Housing & Urban Development

Mr. Anthony Tunde Puke Honourable Commissioner Youth & Sports

Mrs. Grace Yemi Elebiyo (JP) Honourable Commissioner for Education

Dr. Omede Adama Idris Honourable Commissioner for Health

Alhaji Yabagi Danlami Bologi Honourable Commissioner for Information

Chief Ali Iteh Ajuh Honourable Commissioner for Commerce & Industry


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Mr. Ibrahim Abdullahi Honourable Commissioner for Works & Transport

Mr. Umoru Ada Mohammed Honourable Commissioner for Rural Development

Dr. Abdulmumuni Ajana Usman Honourable Commissioner for Science & Technology

Engr. Olatunji Oshanisi Honourable Commissioner for Budget and Planning

Mr. Ndamodu Ali Honourable Commissioner For Local Government & Chieftaincy Affairs

Barr. Ojoka Acholo Thomas Honourable Commissioner for Culture & Tourism

Dr. Barr. Hadiza Onotu M.S Honourable Commissioner for Water Resources

Mr. Pius E. Atakida Auditor-General to the State

Mr. Paul Audu Accountant-General to the State

Lead Stockbrokers

Greenwich Securities Limited

Joint Stockbrokers

CardinalStone Securities Limited

Cowry Securities Limited

Springboard Trust & Investment Limited

Resort Securities & Trust Limited

Reporting Accountants

Ernst & Young Nigeria

Rating Agencies

Agusto & Co. Limited

DataPro Limited


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Solicitors to the Issue PAC Solicitors

Solicitors to the Trustees Udo Udoma & Belo-Osagie

Olaniwun Ajayi LP

Receiving Banks Access Bank Plc Ecobank Nigeria Plc

Skye Bank Plc Sterling Bank Plc United Bank for Africa Plc

ABRIDGED TIMETABLE

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Indicative Transaction Timeline

DATE

ACTIVITY

RESPONSIBILITY

31.12.2013 Commence Book Building Issuing Houses

31.12.2013 Conclude Book Building Issuing Houses

31.12.2013 Determine Coupon Rate and Aggregate Value of Bonds Issuing Houses /KGSG

31.12.2013 Dispatch Allotment Confirmation Letters to Successful Participants Issuing Houses

31.12.2013 Hold Completion Meeting All Parties

31.12.2013 Allotment/Delivery and Settlement of Bonds Issuing Houses

03.01.2014

File Allotment Schedule/Offer Documents with SEC Issuing Houses

03.01.2014 03.01.2014

Transfer net Issue proceeds to Kogi State Government File Executed Offer Documents with SEC

Receiving Banks Issuing Houses

17.01.2014 List Bonds on the Floor of the Exchange Stockbrokers

17.01.2014 Forward Summary Report to SEC Issuing Houses

DECLARATION BY THE ISSUER

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Declaration by the Issuer

UTILIZATION OF PROCEEDS

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USE OF PROCEEDS Utilization of Proceeds

The estimated net issue proceeds of N4,803,148,800 after deduction of N196,851,200 (representing 3.937% of the Gross Issue Proceeds), will be utilized to finance infrastructure projects within the State.

SCHEDULE OF KEY INFRASTRUCTURE PROJECTS TO BE FINANCED In fulfilment of the medium to long term strategy of the State, KGSG has decided to embark on a number of infrastructural projects. As stated above, the State intends to utilize the proceeds of the Bonds to finance the following projects:

Projects to be Financed Total Project Cost% Financed by

Issue

Amount financed by

Issue Project Duration

1 Construction of Otokiti-Ganaja, Lokoja Multi-Lane Carriage Way 2,941,104,839.24 30% 882,331,451.77 24 months

SUB-TOTAL 2,941,104,839.24 882,331,451.77

2 500 Housing Units in Lokoja Metropolis 1,599,988,408.00 31% 492,665,982.46 24 months

3 Kogi State Geographic Information System Phase II 500,000,000.00 30% 150,000,000.00 12 months

SUB-TOTAL 2,099,988,408.00 642,665,982.46

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Eastern Senatorial District: Water Schemes at the following

locations: Ejule, Odu-Okpakili, Ida, Ankpa, Agaliga, Imane, Ajaka,

Anyigba and Oguma

1,298,104,771.50 30% 389,431,431.45 24 months

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Central Senatorial District: Water Schemes at the following

locations: Okene Water Works, Ekuku Water Works, Adogo,

Ogori, Magongo, Essomi, Egge, Idoji (Okene North), Idoji (Okene

South), Ageva, Kuroko, Obangede, Nagazi, Oboroke and Ikuehi

988,789,645.60 30% 296,636,893.68 24 months

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Western Senatorial District: Kabba Dam Resuscitation and Water

Works Rehabilitation, Rehabilitation of Water Schemes in Egbe,

Isanlu, Omi, Ogidi, Mopa, and Rehabilitation and Extension of

Aiyegunle-Gbede Water Scheme

789,575,544.60 30% 236,872,663.38 24 months

SUB-TOTAL 3,076,469,961.70 922,940,988.51

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Provision of Infrastructure and Equipment to five (5) zonal

Hospitals at Ankpa, Idah, Dekina, Kabba and Okene as well as

Construction of 5 new cottage hospitals

1,145,747,932.54 30% 343,724,379.76 18 Months

8 Construction of 65 bed Hospital at Odu, Ogboyaga 800,000,000.00 30% 240,000,000.00 24 Months

9Infrastructural Development of the Proposed University Teaching

Hospital, Anyigba2,028,083,325.00 30% 608,424,997.50 12 Months

SUB-TOTAL 3,973,831,257.54 1,192,149,377.26

10 Development of a Modern Motor Park in Lokoja 1,676,870,000.00 30% 503,061,000.00 12 Months

11 Development of the Kogi House in the Federal Capital Territory 2,200,000,000.00 30% 660,000,000.00 24 months

SUB-TOTAL 3,876,870,000.00 1,163,061,000.00

GRAND TOTAL 15,968,264,466.48 4,803,148,800.00

LIST OF CORE PROJECTS TO BE FINANCED UNDER THE N5 BILLION SERIES 1 KOGI STATE BOND ISSUE

Given that the bonds are being issued in tranches under a N20 billion bond issuance programme, the State plans to finance 30% of the above mentioned projects from the N5 billion Series 1 Bond Issue while the balance would be financed from subsequent tranches over the life of the Shelf.

The development of the Kogi House in the Federal Capital Territory will be undertaken via a Private Public Partnership between the State through Kogi Investment & Properties Limited and Kaibo Engineering Group Holdings Limited in an 80%:20% split. The counterpart funding for the remainder to be funded by the State, would be sourced from the internally generated revenue of the State.


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BRIEF DESCRIPTION OF THE PROJECTS TO BE FINANCED WITH THE PROCEEDS 1. Construction of Otokiti-Ganaja, Lokoja Multi-Lane Carriage Way

This project involves the construction of a multi-lane, dual carriage way in Otokiti – Ganaja, Lokoja and is being executed by the Ministry of Works and Transport. The road will be designed to have a width of 21.1m and length of 16,000m. The estimated cost of the project is N2.94billion and the project is expected to be completed within 24 months.

2. Construction of 500 Housing Units

This project involves the development of 500 residential housing units under a Housing Scheme pioneered within the State and is being executed by the Ministry of Land, Housing and Urban Development The proposed Kogi State Housing scheme will consist of 500 units of One to Three bedrooms situated in the Lokoja area. The estimated cost of the proposed Housing Scheme is N1.60 billion and the project is expected to be completed within 24 months.

3. Kogi State Geographic Information System Phase II

The project involves the development of a Geographic Information System (“GIS”) and is being executed by the Ministry of Land, Housing and Urban Development. The scope of work on this project will include the acquisition of GIS data hardware and instrument, creation of a spatial database, training of end users, incorporation of satellite imageries, automation of the State’s land registry and the acquisition of several equipment and computer consumables. The estimated cost for this project is N500million and the project is expected to be completed within 12 months.

4. Water Scheme Development in Eastern Senatorial District

The project involves the development and rehabilitation of core water projects in the Eastern Senatorial District of the State and is being executed by the Ministry of Water Resources. The locations covered under this district include: Ejule, Odu-Apkakili, Idah, Ankpa, Agaliga, Imane, Ajaka, Anyigba and Oguma The estimated cost of the project is N1.79billion and the duration of the various water projects ranges from 24months.

5. Water Scheme Development in Central Senatorial District

The project involves the development and rehabilitation of core water projects in the Central Senatorial District and is being executed by the Ministry of Water Resources. A water works scheme will be developed or rehabilitated in this district. Areas covered under this district include: Okene, Ekuku, Adogo, Ogori, Magongo, Essomi, Egge, Idoji, Kuroko, Obangede, Nagazi, Oboroke, Ikuehi. The estimated cost of the project is N989milion and the duration of the various water projects ranges from 24months.

6. Water Scheme Development in Western Senatorial District

The project involves the development and rehabilitation of core water projects in the Western Senatorial District and is being executed by the Ministry of Water Resources. A water works scheme will be developed or rehabilitated in this district. Areas covered under this district include: Kabba, Isanlu, Mopa, Egbe, Aiyegunle-Gbede and Ogidi.. The estimated cost of the project is N722milion and the duration of the various water projects ranges from 24months.

7. Provision of Infrastructure and Construction of five Cottage Hospitals

This project involves the provision of infrastructure and equipment to five Zonal Hospitals at Ankpa, Idah, Dekina, Kabba and Okene, construction of five new Cottage Hospitals as well as the procurement of medical equipment to the five new Cottage Hospitals. The estimated cost for the projects is N1.15billion and it is expected to be completed within 18 months. It is being executed by the Ministry of Health.


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8. Construction of 65 Bed General Hospital at Odu, Ogboyaga

The project involves the construction of a 65 Bed General Hospital at Odu-Ogboyag and the procurement of medical equipment and provision of infrastructure to the hospital upon completion. The total cost of this project is N800million and it is expected to be completed within 24months. It is being executed by the Ministry of Health.

9. Infrastructural Development in the Proposed Kogi State University Teaching Hospital, Anyigba

The project involves the conversion of an existing hospital – Kogi Diagnostic and Reference Hospital to Kogi State Teaching Hospital, Anyigba. The hospital will provide clinical training to students from the Faculty of Medicine of the Kogi State University, Anyigba and provide clinical and specialized medical services to the populace. The total cost of this project is N2.03 billion and it is expected to be completed within 12months. It is being executed by the Ministry of Health.

10. Development of Modern Car Park in Lokoja

The project involves the construction of a modern car park in Lokoja. The total cost of this project is N1.68 billion and it is expected to be completed within 12months.

11. Development of Kogi House in the Federal Capital Territory, Abuja

The project involves the construction of Kogi House in the Federal Capital Territory, Abuja. The total cost of this project is N2.20 billion and it is expected to be completed within 24 months.

EXTRACTS FROM THE ISSUE & ISSUER RATING REPORT

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EXTRACTS OF THE AGUSTO & CO RATING REPORT

EXTRACTS FROM THE ISSUE & ISSUER RATING REPORT

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EXTRACTS OF THE DATAPRO RATING REPORT

HISTORICAL FINANCIAL INFORMATION – FIVE YEAR FINANCIAL INFORMATION

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REPORTING ACCOUNTANTS REPORT ON HISTORICALS


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STATEMENT OF ACCOUNTING POLICIES

STATEMENT OF ACCOUNTING POLICIES AS AT 31 DECEMBER 2012 The following are the significant accounting policies, adopted by the State Government in preparation of its financial statements:

1. Basis of Accounting

The financial statements prepared under the cash basis of accounting are in accordance with the generally accepted Public Sector Accounting Standards and is consistent with the budget estimates for the financial year. No adjustments have been made to reflect the impact of specific changes in the general price level on the financial statements.

2. Presentation of the Financial Statements

Details of general and specific funds are disclosed by the way of notes in the financial statements of the State Government.

3. Depreciation

In line with cash basis of accounting, fixed assets are not capitalised but written-off in the year of acquisition.

4. Stocks

Stocks are expensed in the year of purchase in line with the cash basis of accounting.

5. Investments

Investments are stated at cost and income from investments is credited on receipt of cash.

6. Foreign Currencies

Transactions in foreign currencies are converted into Naira at the approximate rates of exchange ruling at the time they arise. Balances in the foreign currencies are translated at the exchange rates ruling at the statement of assets and liabilities date.

7. Exchange Rates

The following rates are applicable at the year-end 31December 2012: US$ - N155.27, GBP – N251.0561, EURO – N201.


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STATEMENT OF ASSETS AND LIABILITIES

KOGI STATE GOVERNMENT OF NIGERIA STATEMENT OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2012

Notes 2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

ASSETS

Cash & Bank balances 2&10 3,206,486 2,018,165 240,653 5,153,715 7,616,138

Investments 3 21,593 21,593 21,593 21,593 21,593

Treasury clearance 3,836,349 5,366,586 3,065,064 3,735,377 3,511,370

Total Assets 7,064,428 7,406,344 3,327,310 8,910,685 11,149,101

FINANCED BY

Consolidated Revenue Fund (875,167) 9,542,586 3,009,388 4,758,600 5,078,095

Capital Expenditure & Development Fund 2,674,197 (8,492,775) (3,722,884) (559,035) 714,615

Ministries/Developments 3,000 3,000 3,000 3,000 3,000

Sundries 17,401 17,401 17,401 17,401 17,401

Foreign loans 5,244,997 4,936,132 4,020,405 4,690,719 5,335,990

Internal Loans - 1,400,000 - - -

Total Liabilities 7,064,428 7,406,344 3,327,310 8,910,685 11,149,101


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STATEMENT OF CONSOLIDATED REVENUE FUND

KOGI STATE GOVERNMENT OF NIGERIA STATEMENT OF CONSOLIDATED REVENUE FUND AS AT 31 DECEMBER 2012

2012 2011 2010 2009 2008

Notes N'000 N'000 N'000 N'000 N'000

Opening Balance at 1 January 9,542,586 3,009,388 4,758,600 5,078,095 2,292,085

Revenue

Statutory Allocation 5 53,287,761 55,866,066 39,308,940 34,953,576 38,466,241

Internally generated revenue 6 3,293,209 3,527,610 2,493,170 1,966,758 2,943,846

Grants, Refunds & Reimbursable 108,664 126,582 22,504 841,059 3,235,242

Miscellaneous Receipts 628,354 150,305 318,411 559,634 611,907

Total Revenue 66,860,574 62,679,951 46,901,625 43,399,122 47,549,321

Expenditure

Consolidated Revenue Charges 1,151,102 1,573,628 778,875 710,929 681,729

Recurrent Expenditure 7 45,539,116 31,133,216 22,997,806 18,703,773 24,065,721

Total Recurrent Expenditure 46,690,218 32,706,844 23,776,681 19,414,702 24,747,450

Surplus of Revenue over Expenditure 20,170,356 29,973,107 23,124,944 23,984,420 22,801,871

Transfer (to)/from Capital Development Fund (21,045,523) (20,430,521) (20,115,556) (19,225,820) (17,723,776)

Closing Balance at 31 December (875,167) 9,542,586 3,009,388 4,758,600 5,078,095


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STATEMENT OF CAPITAL DEVELOPMENT FUND

KOGI STATEGOVERNMENT OF NIGERIA STATEMENT OF CAPITAL DEVELOPMENT FUND

AS AT 31 DECEMBER 2012

2012 2011 2010 2009 2008

Notes N'000 N'000 N'000 N'000 N'000

At 1 January (8,492,775) (3,722,884) (559,035) 714,615 2,059,539

Transfer from Consolidated Revenue Fund 21,045,523 20,430,521 20,115,556 19,225,820 17,723,776

Other Capital Receipts 4.1 2,925,164 2,336,118 1,450,887 - -

Total receipts 15,477,912 19,043,755 21,007,408 19,940,435 19,783,315

Capital Expenditure 4.2 (12,803,715) (27,536,530) (24,730,292) (20,499,470) (19,068,700)

Closing balance as at 31 December 2,674,197 (8,492,775) (3,722,884) (559,035) 714,615


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STATEMENT OF CASH FLOWS

KOGISTATE GOVERNMENT OF NIGERIA STATEMENT OF CASH FLOWS

AS AT 31 DECEMBER 2012

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

OPERATING ACTIVITIES

RECEIPTS

Statutory Revenue Allocation 45,742,238 48,935,545 32,693,384 29,227,756 34,242,465

Value Added Tax 7,545,523 6,930,521 6,615,556 5,725,820 4,223,776

Internally Generated Revenue 3,293,209 3,527,609 2,493,170 1,966,757 2,943,846

Grants, Refunds & Reimbursable 108,664 126,582 22,503 841,059 3,235,243

Miscellaneous Receipts 628,354 150,306 318,411 559,634 611,906

Total Receipts 57,317,988 59,670,563 42,143,024 38,321,026 45,257,236

PAYMENTS

Personnel Emoluments 28,308,191 19,802,989 14,147,764 9,380,827 11,596,714

Pensions and Gratuities 2,982,266 2,104,919 1,654,563 1,268,849 1,088,211

Overhead Costs 3,833,084 2,369,952 2,217,880 2,201,589 1,972,843

Grants, Contributions and Subvention. 1,978,707 1,723,053 1,033,681 1,024,452 1,115,252

Miscellaneous Expenses 6,019,149 4,691,505 3,506,267 4,462,888 4,210,094

Public Debt Charges 2,417,719 440,797 437,653 474,960 671,852

Consol. Fund Charges 1,151,103 1,573,628 778,875 710,929 681,729

Payment to Local Govt Joint Account - - - 91,532 91,323

Total Payments 46,690,219 32,706,843 23,776,683 19,616,026 21,428,018

Net cashflow from Operating Activities 10,627,769 26,963,720 18,366,341 18,705,000 23,829,218

INVESTING ACTIVITIES

Construction/Purchase of Assets (12,803,715) (27,536,530) (24,730,291) (20,499,469) (19,068,699)

Net Cashflow from Investing Activities (12,803,715) (27,536,530) (24,730,291) (20,499,469) (19,068,699)

FINANCING ACTIVITIES

Domestic Loans - 1,400,000 - - -

Development loans 605,605 936,118 1,450,888 - -

Capital Grants 2,319,560 - - - -

Net cash flow from Financing Activities 2,925,165 2,336,118 1,450,888 - -

Adjustments for prior year Balances 439,102 14,204 - (667,954) 129,191

Cash and cash equivalent as at year end 1,188,321 1,777,512 (4,913,062) (2,462,423) 4,889,710

Cash and cash equivalent as at 1 January 2,018,165 240,653 5,153,715 7,616,138 2,726,428

Cash and cash equivalent as at 31 December 3,206,486 2,018,165 240,653 5,153,715 7,616,138


22

NOTES TO THE FINANCIAL STATEMENTS KOGI STATE GOVERNMENT OF NIGERIA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

1. INTRODUCTION Kogi State (“Kogi” or the ”State”) was created by the military administration of former President Ibrahim Babangida on the 27th of August 1991. The State was carved from parts of old Kwara and Benue States. The East Senatorial District of the State was created from Benue State while the West And Central Senatorial Districts were created from Kwara State. Kogi State is located in the central region of Nigeria and geographically said to be the most centrally positioned state in the federation. It is popularly referred to as “The Confluence State” because it hosts the confluence of Rivers Niger and Benue and has its capital in Lokoja, where the two rivers meet. The State shares boundaries with the Federal Capital Territory (FCT) and eight states including Niger, Kwara, Nassarawa, Benue, Enugu, Ondo, Ekiti and Edo. Based on the State’s proximity to the FCT, the Abuja International Airport serves as the national and international gateway for air travellers to and from the State. The strategic location of the State positions the State to enjoy the spill-over advantages of investment opportunities.

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

2 CASH AND BANK BALANCES

Cash and Bank Balances 3,206,486 2,018,165 240,653 5,153,715 7,616,138

3,206,486 2,018,165 240,653 5,153,715 7,616,138

3 INVESTMENTS

Unquoted Investments 21,593 21,593 21,593 21,593 21,593

21,593 21,593 21,593 21,593 21,593

4.1 OTHER CAPITAL RECEIPTS

Development loans 605,605 936,118 1,450,887 - -

Capital Grants 2,319,559 - - - -

Domestic Loans - 1,400,000 - - -

2,925,164 2,336,118 1,450,887 0 0


23

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

4.2 CAPITAL EXPENDITURE

Agriculture 2,068,221 1,417,539 1,481,667 2,029,807 2,156,963

Fisheries - - - - 3,000

Manufacturing 40,900 - 20,880 527,784 2,250

Energy 464,853 209,246 122,302 111,632 291,261

Commerce Fin & Corporation 95,780 642,210 252,246 595,964 720,330

Transport 3,169,217 15,054,919 11,324,222 8,096,419 8,755,147

Education 731,458 1,166,847 1,391,119 1,220,027 2,397,473

Health 1,056,867 919,770 759,862 279,076 245,493

Information 134,893 652,911 1,396,234 450,708 798,749

Social Development 478,560 457,503 234,606 101,155 100,000

Water Supply 1,693,680 3,747,832 4,537,633 3,908,484 498,923

Sewage & Drainage 154,082 261,254 1,372,550 1,010,039 746,356

Housing 248,372 686,423 474,757 464,112 792,436

Urban and Rural Development 125,120 98,059 220,706 158,145 35,583

General Administration 2,169,886 2,055,647 1,058,320 1,426,118 1,392,236

General Administration (HOA Projects) 61,150 - 5,000 120,000 132,500

General Administration (Judiciary) 110,676 166,370 78,188 - -

Development projects

TOTAL 12,803,715 27,536,530 24,730,292 20,499,470 19,068,700

5 STATUTORY ALLOCATION

SRA from federation account 34,206,844 32,900,925 25,058,639 18,525,921 25,793,821

Excess crude oil account 3,549,431 6,926,381 7,086,838 10,223,227 8,448,644

Exchange differential 7,510,366 - - 478,608 -

Refunds from Federal Govt 475,597 9,108,239 547,907 - -

VAT Receipts 7,545,523 6,930,521 6,615,556 5,725,820 4,223,776

TOTAL 53,287,761 55,866,066 39,308,940 34,953,576 38,466,241


24

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

6 INTERNALLY GENERATED REVENUE

Taxes 2,739,830 2,276,603 1,523,999 1,264,233 1,422,540

Fines & fees 203,492 123,397 151,856 123,196 72,524

Licences 17,480 14,381 21,964 18,920 27,087

Earning and Sales 32,590 658,630 665,913 281,175 1,145,248

Rent on government property 181,998 1,254 1,534 19,669 36,163

Interest repayment and Dividend 23,432 48,753 5,493 71,727 104,503

Miscellaneous revenue (Parastatals) 72,275 25,473 27,107 27,064 135,781

Others 22,112 379,119 95,304 160,774 -

Total IGR 3,293,209 3,527,610 2,493,170 1,966,758 2,943,846

7 RECURENT EXPENDITURE

Personnel Emoluments 28,308,191 19,802,989 14,147,764 9,380,827 11,596,714

Pensions and Gratuities 2,982,266 2,104,919 1,654,563 1,268,849 1,088,211

Overhead Costs 3,833,085 2,369,953 2,217,879 2,201,589 2,908,602

Grants, Contributions and Subvention 1,978,707 1,723,053 1,033,681 1,024,452 1,115,252

Miscellaneous Expenses 6,019,149 4,691,505 3,506,267 4,261,564 6,593,768

Public Debt Charges 2,417,718 440,797 437,652 474,960 671,851

Payment to Local Government Joint Account - - - 91,532 91,323

TOTAL 45,539,116 31,133,216 22,997,806 18,703,773 24,065,721


25

8. CONTINGENT LIABILITIES

The pension and gratuity obligations of Kogi State Government to its civil servants and officers in the historical years from 2008 to 2012 have not been determined by an actuary as at December 31 2012.The actuarial valuation on the pension and gratuity obligations which we consider significant in determining the actual obligations as at December 2012 has not been concluded. To the extent of the information made available to us by the State’s Executive, we are not aware of any other contingent liabilities against the Kogi State Government.

9. CLAIMS AND LITIGATIONS

There are fifty three civil litigations cases pending against the Kogi State Government which have arisen in its ordinary course of business from the information and schedule of civil litigations matters made available to us as at 18th March 2013.The Solicitors to the Issue reported that these claims give rise to a potential liability of N309,417,547.41 (Three Hundred and Nine Million, Four Hundred and Seventeen Thousand, Five Hundred and Forty Seven Naira Forty One Kobo) and will have no adverse consequences for the proposed Bond Issue.


26

10 ADJUSTMENTS TO STATEMENTS OF ASSETS AND LIABILITIES

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

A. Cash and Bank balances

Balance per audited account 3,466,604 2,018,165 240,653 5,337,413 7,616,138

Adjustments:

Overstated cash balance - - - (183,697) -

Un reconciled developmentloan balance (260,118) - - - -

Balance per Reporting Accountant Report 3,206,486 2,018,165 240,653 5,153,716 7,616,138

B.Total Assets

Total Assets as per audited account 17,532,204 17,559,686 12,158,259 16,727,044 17,014,902

Adjustments:

Remittances (6,231,236) (6,176,920) (4,855,029) (3,852,728) (1,913,971)

Special imprest (1,296,053) (1,296,053) (1,296,053) (1,286,869) (1,283,717)

Touring advances (127,247) (127,247) (126,747) (123,646) (114,997)

Standing order (837,888) (837,888) (837,888) (837,888) (837,888)

Debits in CTB(UBA) (1,715,228) (1,715,228) (1,715,228) (1,715,228) (1,715,228)

Unreconciled developmnet loan balance (260,118) - - - -

Balance per Reporting Balance per Reporting 7,064,434 7,406,350 3,327,314 8,910,685 11,149,101

C. Total liabilities

Total liabilities per audited accounts 17,532,204 17,559,686 12,158,259 16,727,044 17,014,902

Credits in CTB(UBA) (1,122,468) (1,122,468) (1,122,468) (1,122,468) (1,122,468)

Changes in Consolidated

Revenue Fund closing balance** (5,197,698) 986,679 (2,444,368) (6,061,834) (4,743,332)

Changes in Capital Development

Fund closing balance** (4,147,609) (10,017,552) (5,264,113) (632,057) -

Balance per Reporting Accountant Report 7,064,429 7,406,345 3,327,310 8,910,685 11,149,102

D. Net Debits in CTB(UBA)

Debits in CTB (UBA) 1,715,228 1,715,228 1,715,228 1,715,228 1,715,228

Credits in CTB (UBA) (1,122,468) (1,122,468) (1,122,468) (1,122,468) (1,122,468)

Net Debits transferred to CRF 592,760 592,760 592,760 592,760 592,760


27

11 ADJUSTMENTS TO CAPITAL DEVELOPMENT FUND

2012 2011 2010 2009 2008

N'000 N'000 N'000 N'000 N'000

TOTAL CAPITAL RECEIPTS

Balance per audited account 19,625,522 29,061,308 26,271,521 20,572,491 19,783,314

VAT receipts (7,545,523) (6,930,521) (6,615,556) (5,725,820) (4,223,776)

Changes in opening balance (10,017,552) (5,264,113) (632,057) - -

Changes in transfer from Consolidated Revenue fund 13,415,465 2,177,081 1,983,500 5,093,764 4,223,776


** Changes in Capital Development Fund closing balance are as a result

of reclassification of VAT receipts to Consolidated Revenue Fund

changes in transfer to Capital Development Fund

12 ADJUSTMENTS TO CONSOLIDATED REVENUE FUND

A. RECURRENT REVENUE


Adjustments:

VAT 7,545,523 6,930,521 6,615,556 5,725,820 4,223,776

Adjustments for opening balance 986,679 (2,444,369) (6,061,835) (4,743,332) -


B. RECURRENT EXPENDITURE


Adjustments:

Remittance 54,316 1,321,892 1,002,304 1,938,757 1,913,970

Imprest - - 9,185 3,152 1,283,717

Touring 500 3,101 8,649 114,997

Standing Order - - - - 837,888

Net UBA debit balance - - - 592,759

Unreconciled development loan balance 260,118 - - - -


**Recurrent expenditure adjustments represent yearly net movements

for items detailed under 10B and 10D

**Changes in Closing balances of Consolidated Revenue Fund (CRF)

are as a result of adjustments detailed in notes 10B,10D and11 above

STATUTORY AND GENERAL INFORMATION

28


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 operations/business. However, as at 30 September 2013, the total loans and overdraft of the State was N5.9billion.

CLAIMS, LITIGATIONS & DISPUTES

The Solicitors’ review with respect to the claims and litigations against the State Government reveals that there are fifty-three (53) civil ligation matters pending against the State as at 18th March 2013. The claims in these cases give rise to a potential liability of N309,417,547.41 (Three Hundred and Nine Million, Four Hundred and Seventeen Thousand, Five Hundred and Forty-Seven Naira, Forty-One Kobo). The Solicitors are of the opinion that the litigations have arisen from the usual course of the business of governance and will have no adverse consequences for the proposed Bond Issue.

MATERIAL CONTRACTS A vending agreement dated 31 December 2013 between Kogi State Government on the one part and Afrinvest, BGL, Greenwich, Sterling Capital and Radix Capital on the other part by which the latter had agreed to arrange the issuance of N20 Billion Kogi State 15% Fixed Rated Infrastructure Development Bond 2013/2020 on behalf of the State. A Trust Deed dated 31 December 2013 between Kogi State Government on the one part and Skye Trustees Limited and UBA Trustees Limited on the other part by which the latter had agreed to manage, effect and co-ordinate the N20 Billion Kogi State 15% Fixed Infrastructure Development Bond 2013/2020 on behalf of the State. Save as disclosed above, the Issuer has not entered into any contract which may be deemed material in connection with the issue.


29

REMITTANCE TO THE SINKING FUND The following table indicates the amounts to be transferred to the sinking fund for the purpose of servicing interest and principal payments. The Table reflects the Coupon price range of between 14% and 15% per annum.

Monthly Deduction Schedule

Month Monthly Deductions

Month Monthly Deductions

Month 1 124,108,000

Month 43 124,108,000

Month 2 124,108,000

Month 44 124,108,000

Month 3 124,108,000

Month 45 124,108,000

Month 4 124,108,000

Month 46 124,108,000

Month 5 124,108,000

Month 47 124,108,000

Month 6 124,108,000

Month 48 124,108,000

Month 7 124,108,000

Month 49 124,108,000

Month 8 124,108,000

Month 50 124,108,000

Month 9 124,108,000

Month 51 124,108,000

Month 10 124,108,000

Month 52 124,108,000

Month 11 124,108,000

Month 53 124,108,000

Month 12 124,108,000

Month 54 124,108,000

Month 13 124,108,000

Month 55 124,108,000

Month 14 124,108,000

Month 56 124,108,000

Month 15 124,108,000

Month 57 124,108,000

Month 16 124,108,000

Month 58 124,108,000

Month 17 124,108,000

Month 59 124,108,000

Month 18 124,108,000

Month 60 124,108,000

Month 19 124,108,000

Month 61 124,108,000

Month 20 124,108,000

Month 62 124,108,000

Month 21 124,108,000

Month 63 124,108,000

Month 22 124,108,000

Month 64 124,108,000

Month 23 124,108,000

Month 65 124,108,000

Month 24 124,108,000

Month 66 124,108,000

Month 25 124,108,000

Month 67 124,108,000

Month 26 124,108,000

Month 68 124,108,000

Month 27 124,108,000

Month 69 124,108,000

Month 28 124,108,000

Month 70 124,108,000

Month 29 124,108,000

Month 71 124,108,000

Month 30 124,108,000

Month 72 124,108,000

Month 31 124,108,000

Month 73 124,108,000

Month 32 124,108,000

Month 74 124,108,000

Month 33 124,108,000

Month 75 124,108,000

Month 34 124,108,000

Month 76 124,108,000

Month 35 124,108,000

Month 77 124,108,000

Month 36 124,108,000

Month 78 124,108,000

Month 37 124,108,000

Month 79 124,108,000

Month 38 124,108,000

Month 80 124,108,000

Month 39 124,108,000

Month 81 124,108,000

Month 40 124,108,000

Month 82 124,108,000

Month 41 124,108,000

Month 83 124,108,000

Month 42 124,108,000

Month 84 124,108,000

Subtotal 5,212,536,000

Subtotal 5,212,536,000

Total Deductions = 10,425,072,000


30

DOCUMENTS AVAILABLE FOR INSPECTION

The following documents will be available for inspection throughout the life of the Bond at the principal offices of the Lead and Joint Issuing Houses/Book runners and from the Kogi State Ministry of Finance, Lokoja, Kogi State:

The Kogi State Debt Securities (Issuance) Law 2013;

The Shelf Prospectus;

The Programme Trust Deed

The Letter of Confirmation of the ISPO dated 31 December 2013 from the Federal Ministry of Finance;

The Resolution of the Kogi State Executive Council dated 19 December 2013 authorising the N5 billion Series 1 Bond Issue;

The Resolution of the Kogi State House of Assembly dated 27 June 2013 authorising the Bond Issuance;

A Vending Agreement dated 31 December 2013 between Kogi State Government on the one part and the Issuing Houses/Book Runners on the other part;

The Irrevocable Standing Payment Order from the Kogi State’s Accountant-General dated 23 August 2013 authorizing the Accountant-General of the federation to deduct the principal and interest obligations of the Bond directly from the State’s statutory allocation effective;

The Series 1 Trust Deed dated 31 December 2013 between the Kogi State Government, Mainstreet Bank Trustees & Asset Management Company Limited, UBA Trustees Limited, Union Trustees Limited and Skye Trustees Limited;

The report of Ernst & Young on the State’s Revenue and Expenditure Statements for the five years ended 31st December 2012;

The Schedule of Claims & Litigations involving the State, together with the opinion of PAC Solicitors prepared in connection therewith;

The Pricing Supplement/ Supplementary Prospectus dated 31 December 2013 issued in respect of the N5 Billion Series 1 Bond Issue;

The audited financial statements of Kogi State for each of the five years ended 31st December 2008, 2009, 2010, 2011 and 2012;

The 2013 annual budget presented to the Legislative Assembly of Kogi State;

Written consents of the professional parties to the Issue;

The Rating Reports issued by Agusto & Co and DataPro Limited;

The SEC “No Objection” letter for the N20 billion Bond Issuance Programme;

The SEC “No Objection” letter for the N5 billion Series 1 Bond Issue; and

The Letter dated conveying the approval of the Council of the Exchange for the listing and admission to trading of the Bonds on the Official List.

RELATIONSHIP BETWEEN THE STATE AND ADVISERS

As the date of this Prospectus, there is no relationship between the Issuer and any of its advisers except in the ordinary course of business

COST AND EXPENSES The cost, charges and expenses of and incidental to the issue, including fees payable to SEC, the NSE, professional parties fees, printing and distribution expenses are estimated at N196,851,200 amounting to 3.937% of the gross Issue proceeds. These costs are payable by the State and deductible form the proceeds of the issue

PROCEDURE FOR APPLICATION AND ALLOCATION/ALLOTMENT

31


APPLICATION

1. Qualified Investors are hereby invited to place Orders in respect of the Bond Issue.

2. Applications/Orders for the Bonds being offered must be made in accordance with the instructions set out in the Commitment Form. Investors must carefully follow all instructions as applications which do not comply with the instructions may be rejected. 3. The Book Building Period for the Bonds now being offered will open on 31 December 2013 and close on 31

December 2013. Orders must be for a minimum of 10,000 Units and in multiples of 5,000 Units thereafter. The Participation Amount(s) and the Bid Coupon Rate must be entered in the space provided in the Commitment Form.

4. The completion of a Commitment Form is a confirmation by each Participant that the Order is irrevocable and creates

a binding obligation on the Participant which, to the fullest extent of the law, shall not be capable of recession or termination by any Participant.

5. Participants may place Order for the Bonds at any coupon rate within the Pricing Range subject to the Minimum Participation Amount and the terms and conditions stated on the Commitment Form.

6. A corporate Participant should affix its seal in the box and state its Incorporation (RC) Number or in the case of a corporate foreign subscriber its appropriate identification number in the jurisdiction in which it was constituted.

7. Upon the completion and submission of the Commitment Form, the Participant is deemed to have authorised the Issuer and the Issuing Houses/Book Runners to effect the necessary changes in the Red Herring Prospectus as would be required for the purposes of filing the Final Prospectus with the SEC, without prior or subsequent notice of such changes to the Participant. The Bid/Commitment Form shall be considered as the Application Form for the purposes of registration of the Final Prospectus with the SEC.

8. Participants shall not be entitled to withdraw/modify Order after the Book Building Closing Date.

9. The Commitment Form presents the Participant with the opportunity to indicate up to three (3) Coupon Payment Rates with the Pricing Range and to specify the Participation Amount for each option. The Coupon Payment Rates and the Participant Amounts submitted by the Participant in the Commitment Form will be regarded and treated as optional demands from the Participant and will not be aggregated.

10. Participants must not submit another Commitment Form after the submission of a Commitment Form to a Placement Agent. The submission of a second or other Commitment Form(s) to either the same Book Runner/Stockbroker will be treated as multiple Bids/Orders. Multiple or suspected multiple Bids/Applications will be rejected.

11. Following the determination of the Coupon Rate, the maximum Participation Amount specified by a Participant at or below the Clearing Price will be considered for allocation of Bonds and all other order(s) irrespective of the corresponding Coupon Payment Rate(s), will automatically become valid.

12. The Issuer in consultation with the Book Runners reserves the right not to proceed with the Issue at anytime including after the Book Building opening Date but before the Allotment Date without assigning any reason


32

PAYMENT INSTRUCTIONS

1. Successful Participants must ensure that payment of the Participation Amount is received by 2 January 2014 (Pricing Date+2) via the CBN Inter-bank Funds Transfer System (CIBFT), Nigerian Inter-bank System Electronic Transfer (NEFT) or Real Time Gross Settlement System (RTGS) in the following designated Issue Proceeds Account domiciled with the receiving banks

ALLOCATION/ALLOTMENT BANK ACCOUNT NAME ACCOUNT NUMBER SORT CODE

Access Bank Plc Kogi State Bond/Access 0065370988 044150149

Ecobank Nigeria Plc Kogi State Government Bond 4112062797 050280074

Skye Bank Plc Kogi State Bond Offer Amount 1790142944 076142879

Sterling Bank Plc Kogi State Series 1 Bond Issue 0023968007 232280012

United Bank of Africa Plc Kogi State Series 1 Bond Issue 1017771952 033283247

ALLOCATION/ALLOTMENT 1. On the Pricing Date, the Issuing Houses/Book Runners will analyze the demand at respective coupon levels and, in

consultation with the Issuer, finalize the Coupon Payment Rate and the allocations to each Participant. Allocation Confirmation Notices will be sent to successful Participants.

2. The Issuer and the Issuing Houses/Book Runners reserve the right to accept or reject any order in whole or in part for having not complied with the terms and conditions of the Issue

3. Allotment of the Bonds will be effected only upon clearance of the Final Prospectus by the Commission. Allotment will be effected in the following manner –

a. Allotment of Bonds Electronically (E-Allotment)

Participants who elect to receive the Bonds electronically must specify the Participants CSCS Account Number, the Primary Dealer or Stock broking Firm and the CHN in the spaces provided on the Bid/ Application Form. The Bonds shall be allotted 24 hours after receipt of the final allotment schedule approved by the Issuer.

Please note that Participants must ensure that the name specified in the Commitment Form is exactly the same as the name in which the CSCS Account is held. In case the Commitment Form is submitted in joint names, it should be ensured that the beneficiary CSCS Account is also held in the same joint names and are in the same sequence in which they appear in the Commitment Form.

DETAILS OF BANK ACCOUNTS 1. Participants are required to indicate their bank account details in the space provided on the Commitment Form for

the purposes of coupon and principal re-payments (as the case may be). 2. Participants are advised to ensure that the bank account details provided on the Commitment Form are accurate.

These bank account details shall be used by the Registrar for the payments stated above in connection with the Bonds.

Failure to provide correct bank account details could result in delays in the credit of the payments or the issuance of cheques/warrants which shall be sent to the address specified by the affected Participant by registered post. The Issuer, Issuing Houses, Receiving Banks, Trustees and Registrar shall not have any responsibility, nor will any of these stated parties undertake any liability for the same.


33

COMMITMENT FORM

FOR ELIGIBLE INVESTORS ONLY

KOGI STATE GOVERNMENT

Offer for Subscription N5 BILLION [x%] Series 1 Bond Issue Due 2020

Issue Price; N1,000 per Unit LEAD ISSUING HOUSE JOINT ISSUING HOUSES

Orders must be made in accordance with the instructions set out in this Red Herring Prospectus. Investors must carefully follow all instructions as applications which do not comply with these instructions may be rejected. If in doubt, please consult your Stockbroker, Banker, Solicitor, or any professional adviser for guidance.

Participants have the option to make a maximum of three orders on the Commitment Form. Each option shall be regarded as a separate application and will not be considered as multiple applications. All orders must be for a minimum amount of N10 million (Ten Million Naira) and in multiples of N 5million (Five Million Naira) thereafter.

ORDER 1

ORDER 2

ORDER 3

BOOK BUILD PERIOD

OPENS CLOSES

[.] [.]

QUALIFIED INVESTOR (PLEASE TICK )

DATE (DD/MM/YYYY)

CONTROL No. (FOR REGISTRARS’ USE ONLY)

High Net worth Investors

Fund Managers

Pension Fund Administrators

Insurance Companies

Investment/Unit Trusts

Market Markers

Staff Schemes

Trustees/ Custodians

Stock broking Firms

Resident Corporate Investors

Non-Resident Investors

Hedge Funds

DECLARATION

I/We confirm that I am/we are eligible to participate in this Bond Issue in accordance with the applicable SEC Rules & Regulations.

I/We hereby irrevocably undertake and confirm that my/our Order(s) for the Bonds equivalent to my/our Participation Amount(s) set out below at the Coupon Rate to be discovered through the Book Building Process.

I/We authorize you to enter my/our name on the Register of holders as a holder(s) of the Bonds that may be allotted to me/us and to register my/our address as given below.

I/We note that the issuer and the Issuing Houses/Book Runners are entitled in their absolute discretion to accept or reject this order.

I/We agree to accept the Participation Amount as may be allocated to me/us subject to the terms of this Red Herring Prospectus.

I/We authorize the issuer to amend the Red Herring Prospectus as may be required for filing the Final Prospectus with SEC without recourse to me/us and I/We use this Commitment form as the Application for the purpose of this issue.

I/We confirm that I/We have read the Red Herring Prospectus that my/our order is made on the terms set out therein

IN FIGURES

N

BID COUPON RATE (%)

IN WORDS

IN FIGURES

N

BID COUPON RATE (%)

IN WORDS

IN FIGURES

N

BID COUPON RATE (%)

IN WORDS

COMMITMENT FORM

PLEASE COMPLETE ALL SECTIONS OF THIS FORM IN BLOCK LETTERS

PARTICIPATION DETAILS (The Participation Amount (s) and the Bid Coupon Rate (s) being offered must be indicated out in the boxes below).

PARTICIPATION AMOUNT




34

SURNAME / CORPORATE NAME

FIRST NAME (FOR INDIVIDUALS ONLY) OTHER NAMES (FOR INDIVIDUALS ONLY)

JOINT APPLICANT’S FIRST NAME (IF APPLICABLE) OTHER NAMES (FOR JOINT APPLICANT ONLY)

CONTACT PERSON (FOR CORPORATE APPLICANT)/NEXT OF KIN (FOR INDIVIDUAL APPLICANT)

ADDRESS IN FULL (PLEASE DO NOT REPEAT APPLICANT(S)’ NAME & POST BOX IS NOT SUFFICIENT

Please tick to indicate an allotment preference - Certificate / Electronic (BOOK ENTRY)

Please credit my/our CSCS Account as detailed below to the extent of the Bonds allotted:

PARTICIPANT’S CSCS ACCOUNT NO: CHN (CLEARING HOUSE NUMBER): NAME OF STOCKBROKING FIRM:

SINGNATURES

SIGNATURE

2ND SIGNATURE (CORPORATE/JOINT)

SEAL & RC. No.

NAME OF AUTHORISED SIGNATORY (Corporate only):

NAME OF AUTHORISED SIGNATORY (Corporate/Joint):

DESIGNATION (Corporate only):

DESIGNATION (Corporate only):

STAMP OF BOOK RUNNER/SELLING AGENT

(BOOK RUNNERS/ISSUING HOUSES/STOCKBROKERS TO THE ISSUE ONLY)

STAMP OF RECEIVING AGENT

TEL:

CITY

STATE

E-MAIL

ALLOTMENT PREFERENCE

E- ALLOTMENT DETAILS (FOR BOOK-ENTRY ALLOTMENTS ONLY)

BANK NAME BRANCH

ACCOUNT NO: CITY/STATE

INVESTOR DETAILS (INDIVIDUAL/CORPORATE/JOINT) (Please use one box for one alphabet leaving one box blank between first word and second)

second)

BANK DETAILS (FOR E-PAYMENTS)

SIGNATURES

KOGI STATE GOVERNMENT OF NIGERIA N20 BILLION BOND … · BB (DataPro Limited) 22....

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