Activity in the domestic debt market increased as companies continued to take advantage of relatively low market yields to fund, among other things, business expansion. Dangote Industries Limited has looked in this direction by deepening the Nigerian debt market by successfully issuing its N187.6 billion Series 1 bond issue, which is the largest corporate bond ever issued in the history of the market. Nigerian capital.
Debt market, bond market, fixed income market or credit market is the collective name given to all transactions and issuances of debt securities. Governments typically issue bonds in order to raise capital to repay debts or finance infrastructure improvements. Publicly listed companies issue bonds when they need to fund business expansion projects or maintain ongoing operations.
A bond works like a loan between an investor and a company. The investor agrees to give the company a certain amount of money for a specific period of time. In exchange, the investor receives periodic interest payments. When the bond matures, the company repays the investor.
The bond issue included seven-year Tranche A and 10-year Tranche B bonds. Seven-year Tranche A bonds priced at 12.75% and 10-year Tranche B bonds priced at 13.50%. The bond issue attracted participation from a wide range of institutional investors, including pension funds and asset managers, backed by an AA+ rating from GCR and an AA(ngr) rating from Fitch.
The bonds will be listed on the Nigerian Exchange Limited (NGX) and the FMDQ Securities Exchange Limited (FMDQ).
The high level of subscription is an indication of investors’ confidence in Dangote Industries’ position as the largest and most diversified industrial conglomerate in West Africa, its strong management team, its business strategy and its credit profile. The sponsor will use the proceeds from the bond issue to partially fund the Dangote Oil Refinery Project.
Speaking on the landmark issue recently at the signing ceremony, Managing Director of Dangote Industries, Mr. Olakunle Alake expressed his delight at the remarkable success of the bond issue and thanked the issuing houses and the other professional parties for working tirelessly to ensure timely delivery. and the success of the bond issue.
According to Alake, we are very pleased with the level of reception from the investor universe to the Series I bond issuance and to have reached this remarkable milestone, showcasing the depth and liquidity of the capital market of Nigerian loan.
“The success of this transaction demonstrates once again the confidence of investors in our credit history and the appreciation of the work carried out by the Group in several key sectors which are crucial for the development of the continent.
“The proceeds from this historic transaction will be used to part-finance the Dangote Oil Refinery Project, which is the Group’s initiative to establish the largest refinery in Africa, thereby positioning Nigeria as a net exporter of crude oil. refined. We appreciate the trust placed in us by our investors, as well as our various advisors and stakeholders.
Managing Director/Managing Director of Vetiva Capital Management Limited, Chuka Eseka, said: “Vetiva is delighted to have acted as lead issuer/bookrunner on the Series 1 bond issue, which represents the largest single bond issue by a company in the Nigerian capital market.
“This impressive exit from DIL demonstrates investor confidence in the Company and the game-changing potential of the project which will be funded by the proceeds of the bond issue. We thank the Board of Directors and management of Dangote Industries for placing their trust in us and other professional parties on this historic transaction and for giving us the opportunity to deploy our capital raising expertise on the broadcast.
Speaking about the transaction’s Executive Director, Corporate, Commercial and Institutional Banking, Nigeria & West Africa of Standard Chartered, Mr. Olukorede Adenowo, noted that “On behalf of the issuing houses, we are proud to have led this historic transaction which reflects the strong credit quality of the issuer as well as the resilience of the Nigerian domestic debt capital markets, despite the current global market volatility.
“We thank the Dangote Group Board and Management for striving to continuously develop the domestic debt capital markets and for setting records through its various issuances, both at subsidiary and corporate level. at group level. We also thank the Securities & Exchange Commission (SEC), Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited for their continued support throughout this process.
Executive Director, Debt Capital Markets, Amaka Nsofor, emphasized that “We are very pleased with this remarkable achievement. In line with our mandate, we will continue to work with our clients across Africa to realize their growth aspirations and use our leadership position in the capital market to drive development on the continent.
Standard Chartered Capital & Advisory Nigeria Limited acted as lead issuing house and bookrunner for the transaction, while Vetiva Capital, Meristem Capital, Stanbic IBTC Capital, Absa Capital Markets, Afrinvest Capital, Coronation Merchant Bank, Ecobank Development Company, FBNQuest Merchant Bank, FCMB Capital Markets, Greenwich Merchant Bank, Quantum Zenith Capital, Rand Merchant Bank Nigeria and United Capital acted as joint issuing houses.
Dangote Industries is one of the leading diversified and fully integrated conglomerates with operations in Nigeria and Africa across a wide range of industries including cement, sugar, salt, condiments, packaging, energy, fertilizers and petrochemicals. Its core business is to provide local value-added products and services that meet the “basic needs” of the African population through the construction and operation of large-scale manufacturing facilities in Nigeria and throughout the country. ‘Africa. DIL focuses on building local manufacturing capacity to create jobs, reduce capital flight from Africa and increase local value addition.
The Group has 11 separate business segments, with the cement, sugar and salt businesses currently contributing the majority of the group’s profits. These subsidiaries are industry-leading players with strong brand values, underpinned by long operational experience, a diverse customer base, continuous investments in capacity expansion and control of their respective value chains. DIL also has two project companies, Dangote Oil Refinery Company Limited (DORC) and Dangote Fertilizer Limited (DFL), located in the Lekki Free Zone in Lagos State, which (together with DIL) will serve as joint debtors under the the offer. DORC is a 650,000 barrel per day (bpd) integrated crude oil refinery and petrochemical plant, expected to be Africa’s largest oil refinery, while DFL is expected to be Africa’s largest oil manufacturing plant. granulated urea fertilizer from Africa, with a production capacity of up to 2.8 Mtpa.