Coronation Merchant Bank appointed as joint issuing house for Dangote Cement Plc’s 5-year Fixed Rate Senior Unsecured Bonds
The book build for the Dangote Cement PLC Series 1, 5-year Fixed Rate Senior Unsecured Bonds, under its NGN300 billion Debt Issuance Programme is now opened.
We are pleased to inform you that the book build for the Dangote Cement PLC (“Dangote Cement” or “DCP”) Series 1, up to NGN [100] billion 5-year Fixed Rate Senior Unsecured Bonds, under its NGN300 billion Debt Issuance Programme, opens on Friday, 03 April 2020 and will close on Tuesday, 14 April 2020.
Dangote Cement, Nigeria’s largest company by market capitalisation on the Nigerian Stock Exchange, is the largest cement manufacturer in Sub-Saharan Africa with an installed capacity of 45.6Mta across its operations in 10 African countries. DCP operates a fully integrated “quarry-to-customer” business in 7 of its operations with activities covering manufacturing, sales and distribution of cement.
DCP has a strong track record in the debt capital markets, having registered a NGN150 billion Commercial Paper programme in 2018, and issued an aggregate amount of NGN300 billion in Commercial Paper since programme establishment. Dangote Cement is now looking to launch a debut offering in the bond markets and plans to utilize proceeds of the bond issuance to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.
Dangote Cement is assigned an AA+ long-term rating by GCR and Aa2.ng long-term rating by Moody’s. DCP has also consistently reported robust operating and net profit margins compared to its peers in Sub-Saharan Africa and in other jurisdictions. DCP has adequate working capital, satisfactory cash flow, and a very experienced management team. The company is one of few corporates in Nigeria with a top-notch rating of AA+.
The price guidance range for the Issue is 12.25% to 12.50% per annum. This is reflective of the top credit quality of the issuer, whilst also offering a premium over subsisting inflation levels. Other indicative terms of the offer are as presented below.
Kindly find below a summary of the Bond Issuance:
Issuer | Dangote Cement PLC | |
Programme Size | NGN300 billion | |
Issue Size | Up to NGN[100] billion (with option to upsize) | |
Greenshoe | Subject to demand and pricing, Issuer may allot up to NGN[300] billion of Bonds | |
Description | Series 1 Fixed Rate Senior Unsecured Bonds | |
Issuer Rating | AA+ (GCR); Aa2.ng (Moody’s) | |
Issue Rating | AA+ (GCR); Aa3.ng (Moody’s) | |
Tenor | 5 years | |
Benchmark | Prevailing 5-yr Treasury Bond (FGN 23-March-2025) | |
Book Building Price Guidance | [12.25% – 12.50%] | |
Par Value / Issue Price | NGN1,000 per unit | 100% of Par Value |
Offer Open / Offer Close | Friday, 03 April 2020 | Tuesday, 14 April 2020 |
Funding / Settlement Date | Friday, 17 April 2020 | |
Day Count Fraction | Actual / Actual | |
Offer Mode | Offer for Subscription via Book Build | |
Coupon Basis | Fixed Rate, semi-annual | |
Units of Sale | Minimum of NGN10,000,000 (10,000 units at NGN1,000/unit) and multiples of NGN1,000 thereafter | |
Redemption / Payment Basis | Bullet repayment | |
Listing | FMDQ Securities Exchange and / or The Nigerian Stock Exchange | |
Use of Proceeds | Fund expansion projects, refinance existing commercial bank debt and for general corporate purposes | |
For further inquiries, contact:
Suru Daniels on 07032999560 or SDaniels@coronationmb.com,
Evelyn Akana on 08025420974 or eakana@coronationmb.com and
Ngozi Kalu-Mba on 09094266733 or nkalu-mba@Coronationmb.com