Section 269 Investments and Securities Act

Section 269 of the Investments and Securities Act 2025 is about Issue of registered bonds, promissory notes, general obligation debt securities and revenue or project tied debt securities (project bonds). It is under Part XVI (Issuance of Securities) of the Act. It provides as follows:

(1) Subject to subsections (2), (3) and (4), a body to which this Part applies may issue to the public, debt securities in the form of —
(a) bonds;
(b) promissory notes;

(c) non-interest financial instruments; or
(d) such other instruments as may be approved by the Commission.

(2) Debt securities issued under subsection (1)(a), may be —
(a) general obligation debt securities issued on the full faith and credit of the issuing body charged upon and payable out of the revenue fund or other statutory fund of such body; or

(b) project-tied debt securities issued for specific projects charged upon and payable out of —
(i) the revenue from the project,
(ii) a specific asset or assets, or
(iii) a guarantee from the relevant Federal, State or Local government or other acceptable third party.

(3) A body to which this Part applies shall be entitled to issue general obligation debt securities only where —
(a) the Internally Generated Revenue (IGR) of the State or Federal Capital Territory is not less than 60% of its consolidated revenues for three years;

(b) its total annual debt service obligations, including the debt service obligation arising from the proposed issuance, is not at any time exceeding 40% of the actual revenue that accrued to its consolidated revenue fund or other statutory fund in the 12 months period immediately preceding the
proposed new issuance; or

(c) it complies with such other debt sustainability ratio as may be specified by the Commission or other relevant authority which takes account of the total current and future debt service obligations, other contractual obligations, and the variability of the future revenue of the issuing body.

(4) A body to which this Part applies shall be entitled to issue project-tied debt securities only where —
(a) the assets of, and revenues from the project to which the project-tied debt securities relate are ring-fenced;

(b) the projects, instruments or assets to be funded or acquired as the case may be from the proceeds of the issue has the minimum investment grade rating from at least two rating agencies recognised by the Commission or such other rating as the Commission may specify;
(c) the project-tied debt securities are guaranteed by —
(i) a body to which this Part applies other than the issuer, and the provisions as specified in subsection (3) shall apply to the guarantor, or
(ii) a bank, insurance company or other third party acceptable to the Commission:

Provided that such a guarantor shall have the minimum investment grade rating and satisfy any other conditions as may be specified by the Commission; and

(d) it meets such other requirements as may be determined by the Commission.

(5) Bonds or other securities issued under this Part for the purpose of raising any specified sum of money shall be deemed to be separate, notwithstanding that the sum of money so raised is part of a sum of money authorised by any other law to be raised.

(6) Securities created or issued under this Part shall be securities to which the Trustee Investments Act applies.

(7) The proceeds of securities issued under this Part shall be utilised solely for the purpose for which the securities were issued.