Zamfara State has issued a seven-year bond at a fixed rate of 17 percent to raise N7 billion ($35 million) for infrastructure projects, the lead issuing house FBN Capital said on Wednesday.

The North Western Nigerian state, which relies on agriculture launched a N30 billion debt programme to help it develop its infrastructure, its advisers said, adding that the first tranche was underwritten on a standby basis.

Bond yields fell below 10 percent across maturities as secondary market trading started on Wednesday, a day after the central bank announced a surprise interest rate cut aimed to stimulate lending in Africa’s biggest economy.

In August and September, Nigeria’s Debt Management Office (DMO) restructured commercial bank loans to 13 cash-strapped states to reduce a growing backlog of domestic debt against falling oil revenues.

In June a governor said that states were in debt to the tune of N658 billion ($3.3 billion).

Several borrowed in the domestic bond market and from banks to fund infrastructure projects. But as the price of crude oil, which represents 70 percent of the country’s revenues, has plunged, states became unable to pay their bills, including salaries. (Reuters)