Dangote Cement Plc has bagged AA+(NG) and A1+(NG) ratings from Global Credit Ratings (GCR).
GCR, in its notice, affirmed the long-term and short-term national scale issuer ratings of AA+ (NG) and A1+(NG) assigned to Dangote Cement Plc. It also said the outlook of the business is ‘Stable’. The cement firm’s N100 billion Series 1 Fixed Rate Bond has also been assigned AA+.
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According to a statement from Dangote, the ratings signify that Dangote Cement’s credit profile and liquidity are very strong, with low risk of default.
The rating accorded to Dangote Cement is an investment-grade rating, signifying that it is an attractive investment vehicle.
Speaking on the rating, Michel Puchercos, Chief Executive Officer, said “Dangote Cement has shown great resilience in 2020 despite the COVID-19 pandemic and a challenging environment.
“The group continues to report strong cash generation while maintaining strong financial discipline. As Africa’s leading cement producer, we are committed to maximising shareholder value creation,” he said.
Dangote Cement in 2020 announced the successful issuance of N100bn Series 1 Fixed Rate Senior Unsecured Bonds due April 2025 under the Company’s N300bn bond programme.
The transaction was 1.5 times oversubscribed and represents Dangote Cement’s debut bond issuance in the debt capital markets.
Book building with respect to the issuance commenced on April 3, 2020, following approval from the Securities and Exchange Commission and closed on April 15, 2020, at a coupon rate of 12.50 per cent.
The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets (as at the time of issue), reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges.
The transaction enabled the company to lower its average cost of debt and extend the average maturity of its debt.
GCR, a founder member of Europe-based ARC Ratings, is licensed as a rating agency in a number of markets, including Kenya with the Capital Markets Authority, Nigeria with the Securities and Exchange Commission, Zimbabwe with the Reserve Bank of Zimbabwe and Mauritius with the Financial Services Commission.
