Tapping into the Nigerian debt capital market for the first time, Dangote Cement Plc is set to join serial issuers like Access Bank Plc, United Bank for Africa Plc (UBA), Lafarge Africa Plc, Flour Mills of Nigeria (FMN) amongst other large corporations, which have mobilized long term debt financing in the Nigerian debt capital market.
Dangote Cement Series 1 Bond, which is up to N100 billion, is a landmark transaction for the Nigerian debt capital market, as it will be the largest-ever single corporate debt issue in the Nigerian capital market. Similar to the Dangote Cement N150 billion Commercial Paper, which has helped deepen that segment of the money market and broaden local investors’ options in the fixed income market, the Series 1 bond, which is the debut issue out of the N300 billion Shelf Programme will further reinforce the potential depth of the Nigerian debt capital market and the ability of local corporates to fund long term projects from the domestic debt market.
Responding to enquiries, Mr. Haruna Jalo-Waziri, the CEO of Central Securities Clearing System Plc (CSCS), Depository to the Bond noted; “With this debut N100 billion debt note, Dangote Cement Plc is once again reinforcing the capacity of the Nigerian debt capital market and setting a new benchmark in terms of size and pricing of corporate bonds. CSCS, being the depository to about half a trillion-naira outstanding corporate bonds from twenty- three issuers, we are excited to onboard Dangote Cement bonds into our depository post the SEC-approval of allotments. My colleagues and I are excited at working with all stakeholders: the Issuer, Joint Lead Arrangers, Exchanges and more importantly esteemed investors; PFAs, Banks, Asset Managers, Trustees, Custodians, Brokerage firms and HNIs, who would be participating in this landmark transaction.” “We earnestly look forward to the approved allotment schedule to promptly credit investors accounts and provide a consolidated view of all their investments across the capital market.” Jalo added in a response to commentary.
Analysts expect the transaction to close at a tight spread to comparable Nigerian Sovereign debt note (i.e the 5-Year FGN Bond), given the strong investment grade rating of the Dangote Cement Series 1 Bonds, AA+ from Global Credit Rating (GCR) and Aa2.ng from Moody’s.