Taofik Salako, Deputy Group Enterprise Editor
NIGERIA’s largest quoted firm and Sub-Saharan Africa’s largest cement firm, Dangote Cement Plc has listed its N100billion debut bond on the Nigerian Inventory Trade (NSE), paving the way in which for traders to commerce on their bonds.
The itemizing of Dangote Cement’s N100 billion bond boosted the excellent non-sovereign bonds to the psychological N1 trillion mark. With greater than N530 billion excellent company debt points and a few N400 billion excellent sub-national bonds, the Nigerian debt capital market is more and more turning into a viable supply of long-term funding for each corporates and state governments.
Dangote Cement’s maiden bond subject was absolutely subscribed, making historical past as the most important single company bond subject within the capital market. It was the primary sequence beneath the corporate’s N300 billion shelf bond issuance programme.
A complete of 100 million models of N1,000 par worth of the Dangote Cement’s N100 billion Sequence 1 5-year Fastened Charge Senior Unsecured Bonds have been admitted to the official listing on the NSE. Whereas the bond can be redeemed on the finish of its five-year tenor, it is going to pay mounted coupon twice a yr. The relevant coupon price is 12.50 per cent.
Dangote Cement plans to make use of the web proceeds of the bond to refinance present short-term debt beforehand utilized in the direction of cement enlargement initiatives, working capital and basic company functions.
The itemizing of the Dangote Cement’s debut bond additional deepens the Nigerian debt capital market, which had seen large-cap issuers like Entry Financial institution Plc, United Financial institution for Africa, Lafarge Africa and Flour Mills of Nigeria, amongst others.
With the success of large-cap issuance like Dangote Cement’s N100 billion, many analysts mentioned the medium to long-term influence of lively issuances and buying and selling on the secondary debt market would additional open up long-term debt capital to small and medium firms.
Chief Govt Officer, Central Securities Clearing System Plc (CSCS), Mr. Haruna Jalo-Waziri, mentioned the N100 billion bond would additional reinforce the depth of the Nigerian debt capital market and the flexibility of native corporates to fund long run initiatives from the home debt market.
He mentioned CSCS was excited because the depository to the N100 billion landmark issuance noting that because the depository to about half a trillion-naira excellent company bonds from 23 issuers, CSCS is taking part in essential roles in constructing issuers’ and traders’ confidence within the home debt market.
Based on him, with the debut N100 billion bond, Dangote Cement has as soon as once more bolstered the capability of the Nigerian debt capital market and set a brand new benchmark when it comes to dimension and pricing of company bonds.
Dangote Cement is Africa’s main cement producer with practically 46Mta capability throughout Africa. It’s a absolutely built-in quarry-to-customer producer, with a manufacturing capability of 29.25Mta in its dwelling market, Nigeria. Obajana plant in Kogi State, is the most important in Africa with 13.25Mta of capability throughout 4 strains; Ibese plant in Ogun State has 4 cement strains with a mixed put in capability of 12Mta and Gboko plant in Benue state has 4Mta.
As well as, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), and Zambia (1.5Mta).