Absa Capital Markets Nigeria has successfully completed a debut bond offering for Nigerian multinational cement manufacturer Dangote Cement, as its joint lead issuing house.
Absa has allocated 100-billion naira in five-year fixed rate senior unsecured bonds under its 300-billion naira issuance programme.
Dangote Cement will use the proceeds of this term bond offering to refinance existing short-term debt, as well as for working capital and general corporate purposes.
The issuance is the largest corporate bond ever priced in the history of the Nigerian debt capital market.
Dangote Cement CEO Michel Puchercos says the bond issuance allows the company to further broaden its sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of its 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.
“The bond issuance was a landmark deal given the turbulent market caused by a sharp fall in oil prices and the impact of Covid-19, which resulted in lockdowns being imposed in the states of Lagos, Abuja and Ogu, which lasted the duration of the book-build period,” he adds.
Despite the lockdown, investors held virtual credit committee meetings and bidding in the book was done while navigating working from home during the lockdown period.
These challenges were also overcome by holding the bidding period open for longer than average, active investor engagement, a well-informed arranging consortium and the positive perception of Dangote Cement in the capital markets.
“The success of the bond issuance demonstrates Absa’s expertise in providing tailormade debt and capital raising solutions for its corporate clients in Nigeria and across the African continent,” comments Absa investment banking debt capital markets head Kumeshen Naidoo.
Absa in Nigeria has, in the past few years, recorded many landmark transactions, including several large upstream oil and gas syndications, international bond offerings for Nigerian issuers and the largest-ever initial public offering on the Nigerian Stock Exchange.