Nigeria’s Lagos state will ask bondholders next month to agree a change to the payment schedules for 167.5 billion naira ($842 mln) of bonds, the state government said on Monday.
The state wants to pay interest and principal semi-annually rather than making a single bullet repayment of the principal at maturity.
Lagos, a mega-city of 21 million people in the state of the same name, is the commercial engine of Africa’s biggest economy and accounts for about a third of Nigeria’s overall output.
The meeting will be held on February 23.
The state government said the debt in question includes an 80 billion naira seven-year bond maturing in 2019 and an 87.5 billion naira to be repaid in 2020. Coupons on the bonds would remain unchanged at 14.5 percent and 13.5 percent respectively.
The state government did not say why it wants to change the payment schedule but analysts said Lagos may be hoping to sell new debt at lower yields to fund infrastructure projects.
Nigeria’s government approved a $200 million loan from a World Bank agency this month to develop infrastructure in Lagos state, the minister for works, power and housing said.