Under its new N300 billion Multi-Instrument Issuance Programme, Africa’s largest cement producer, Dangote Cement Plc has announced the successful issuance of 50 billion Series 1 Fixed Rate Senior Unsecured Bonds.
Despite market headwinds, the bond issuance was well received and recorded participation from a wide range of investors including domestic pension funds, asset managers, insurance companies and high net-worth investors.
The proceeds of the bond issuance will be deployed for the company’s expansion projects, short-term debt refinancing and working capital requirements.
The bonds were issued on May 26, 2021 at coupon rates of 11.25%, 12.50% and 13.50% for the 3, 5 and 7-year tranches respectively.
Aside from this first issuance of a traditional bond under the new Multi-Instruments Programme, Dangote Cement has registered a programme enabling it to consider different types of fixed income instruments to cater for different types of investors.
A statement from the cement giant’s Deputy Company Secretary, Mr. Edward Imoedemhe, in Lagos quoted the Chief Executive Officer, Michel Puchercos, as saying the ability to issue Green Bonds and Sukuk will enable the company to leverage the depth and breadth of the Nigerian market.
“This bond issuance allows us to move a step further in achieving our expansion objectives and will be deployed to projects instrumental in supporting our export strategy while improving our cost competitiveness.
“We thank the investor community for their continued support in the management of Dangote Cement and their successful participation in the bond issuance,” he said.
The bonds, expected to be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange, according to the company, has Absa Capital Markets Nigeria acting as Lead Issuing House for the Series 1 Bonds.
Dangote Cement Plc is sub-Saharan Africa’s largest cement producer with an installed capacity of 48.6Mta across 10 African countries.
The company has a long-term credit rating of AAA by GCR and Aa2.ng by Moody’s due to its market-leading position, significant operational scale, and robust operating and net profit margins relative to regional and global peers, adequate working capital, good cash flow, and low leverage.