Africa’s largest cement producer, Dangote Cement Plc, has announced the successful issuance of its N100 billion Series 1 Fixed Rate Senior Unsecured Bonds due April 2025 under the Company’s NGN300 billion Bond Programme.
According to the cementmaker, the transaction was 1.5 times oversubscribed and represents Dangote Cement’s debut bond issuance in the debt capital market.
The 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 transaction which represents the largest corporate bond issuance in Nigeria’s debt capital market, had a total order book amounted to N155 billion.
The transaction is expected to lower the company’s 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.
Michel Puchercos, chief executive officer, Dangote Cement, said the landmark transaction is the largest ever bond issuance by a corporate issuer in Nigeria.
