Stanbic IBTC Capital Facilitates Axxela’s N16.4bn 10-Year Bond Sales

By Aduragbemi Omiyale

The investment banking subsidiary of Stanbic IBTC Holdings, Stanbic IBTC Capital, has used its expertise in the Nigerian capital market to help with the successful issuance of the 10-year series 1 fixed-rate bond of Axxela Limited.

The leading gas and power portfolio company recently sourced about N16.4 billion from the capital market through its incorporated funding vehicle, Axxela Funding 1 Plc.

The bond, due in 2034, was issued by Axxela under its N50 billion Multi-Instrument Issuance Programme, with Stanbic IBTC Capital as the lead issuing house for the transaction.

It was observed that despite the challenging economic conditions, with upward pressure on interest rates and tight market liquidity, the exercise was well-received and achieved a 109 per cent subscription from a wide range of investors including Pension Fund Administrators (PFAs), Asset Managers and High Networth Individuals (HNIs), reflecting investors’ confidence in Axxela Limited, with the company initially targeting N15 billion but ultimately issuing N16.4 billion due to strong demand.

“We extend our heartfelt gratitude to the investor community for their support and continued confidence in Axxela’s long-term vision and strategy.

“The success of the transaction underscores the trust placed in our management team and our commitment to driving sustainable growth in Nigeria’s energy sector.

“We are very proud of this transaction and the trust of investors in our business model and growth prospects,” the chief executive of Axxela Limited, Bolaji Osunsanya, said.

Also speaking, the chief financial officer of the firm, Timothy Ononiwu, said, “We are grateful for the success of the transaction, which speaks to the investors’ recognition of Axxela’s operating and financial performance over the years and the significant growth prospects across our value chain.

“We will continue to explore opportunities to diversify our funding sources and optimize our funding structure towards achieving our financial objectives.

“We are also thankful for the support of our advisers who guided us through this process and the investors who continue to believe in our story.”

On his part, the chief executive of Stanbic IBTC Capital, Mr Dele Sotubo, highlighted the significance of the transaction in demonstrating the depth, liquidity, and resilience of the Nigerian debt capital market.

“Stanbic IBTC Capital is delighted to have played a key role as Lead Issuing House and adviser to Axxela Limited in facilitating this Transaction,

“At Stanbic IBTC, we are committed to the development of Nigeria’s energy sector and the broader economy. This Transaction aligns with our sustainability agenda and we will continue to support projects that promote the environmental, social, and economic development of Nigeria.

“We thank Axxela for trusting Stanbic IBTC Capital and the other joint issuing houses in seeing the issuance to successful completion,” he added.

Business Post reports that the bond issuance will enable Axxela Limited to fund its long-term capital expenditure, manage its weighted average cost of capital via a fixed rate instrument and diversify its funding sources while meeting its strategic objectives.

It also presents an attractive investment opportunity for the investor community who seek viable investment options and encourages other corporates to explore the domestic fixed-income markets to meet their funding requirements.