Debut Issuance of ₦100 Billion Series 1 Fixed Rate Senior Unsecured Notes Due April 2025
Under The ₦300 Billion Bond Programme
Largest ever corporate bond issuance in the Nigerian debt capital market
More than 1.5 times oversubscribed
LAGOS, NIGERIA – 23 April 2020: Dangote Cement Plc (DANGCEM-NL), Africa’s largest cement producer, announces the successful issuance of ₦100 Billion Series 1 Fixed Rate Senior Unsecured Bonds due April 2025 under the Company’s ₦300 Billion 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 3 April 2020 following approval from the Securities and Exchange Commission and closed on 15 April 2020 at a coupon rate of 12.50 percent.
Despite current market headwinds due to the COVID-19 pandemic, the transaction was extremely well received and attracted significant demand from a wide range of high-quality investors including domestic pension funds, asset managers, insurance companies, banks and international fund managers. The total order book amounted to ₦155 Billion.
The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets, reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges.
The transaction enables the Company to lower its average cost of debt and extend the average maturity of its debt. Dangote Cement intends to use the net proceeds of the offering to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.
Commenting on the bond issuance, Michel Puchercos, Chief Executive Officer of Dangote Cement, said:
“This landmark transaction is the largest ever bond issuance by a corporate issuer in Nigeria. It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.
The success of this transaction, in the current challenging environment, illustrates investors’ continuous confidence in Dangote Cement’s strategy, strong cash generation and solid credit profile.”
Stanbic IBTC Capital acted as the Lead Issuing House for the Series 1 Bonds, and Absa Capital Markets Nigeria, Standard Chartered Capital & Advisory Nigeria, United Capital, Coronation Merchant Bank, Ecobank Development Corporation Nigeria, FCMB Capital Markets, FBNQuest Merchant Bank, Rand Merchant Bank, Quantum Zenith Capital, Futureview Financial Services and Vetiva Capital Management acted as Joint Issuing Houses.
The Bonds will be listed on The Nigerian Stock Exchange and the FMDQ Securities Exchange Limited, and for the first time in the history of the Nigerian debt capital markets, investors will have the option of lodging securities with either the Central Securities Clearing System or the FMDQ Depository.
About Dangote Cement
Dangote Cement Plc is Sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6Mta capacity across 10 African countries. We operate a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement. We have a production capacity of 29.3Mta in our home market, Nigeria. Our Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.3Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through our recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighboring countries.
In addition, we have 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), Zambia (1.5Mta).
Dangote Cement has a long-term credit rating pf AA+ by GCR and Aa2.ng by Moody’s due to its market leading position, significant operational scale and strong financial profile evidenced by the Company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cashflow and low leverage.
Dangote Cement is a subsidiary of Dangote Industries Limited, a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, pasta, beverages, and real estate, with new multi-billion dollar projects underway in the oil and gas, petrochemical, fertilizer and agricultural sectors.