Economy
Stanbic IBTC, Dangote Cement Issue Historic Commercial Paper
By Modupe Gbadeyanka
A partnership has been entered into between subsidiaries of Stanbic IBTC Holdings; Stanbic IBTC Capital and Stanbic IBTC Bank; and Dangote Cement Plc, Africa’s largest cement producer.
The collaboration is to issue the N50 billion Series 1 and 2 Notes, the largest ever Commercial Paper (CP) issuance by a Nigerian company, under the recently established Dangote Cement Plc’s N150 billion CP Programme, which was announced on June 27, 2018.
Reflective of Dangote Cement’s top notch ratings (Aaa/AA+ by Moody’s/GCR), the Series 1 and 2 notes priced at thin spreads of 25 and 50 basis points over the chosen primary market Sovereign benchmark rate, to achieve discount rates of 12.40 percent and 12.65 percent respectively.
Stanbic IBTC Capital acted as sole Arranger of the CP Programme while Stanbic IBTC Bank is the Issuing, Calculation and Paying Agent on the transaction.
The Series 1 and 2 Notes will be listed on Nigeria’s FMDQ OTC Securities Exchange on Thursday, July 19, 2018.
Funds raised in the CP Programme are expected to be used for capital expenditure, working capital and general corporate purposes, according to parties to the deal.
Speaking at the signing ceremony, which held at Dangote Cement Plc headquarters in Lagos on Tuesday, July 3, 2018, Mr Kobby Bentsi-Enchill, the Executive Director and Head, Debt Capital Markets, Stanbic IBTC Capital, expressed delight that Stanbic IBTC Capital advised Dangote Cement to accomplish this landmark CP issuance.
According to Mr Bentsi-Enchill, Stanbic IBTC Capital is committed, in line with the Stanbic IBTC Group’s value proposition and investment banking pedigree, to assist businesses with high-quality advisory and arranging services that would enhance their growth and expansion prospects by providing access to a diverse range of financing options within the domestic capital markets.
“Stanbic IBTC Capital will continue to exploit opportunities to help provide businesses with access to critical funding, short and long term, for their needs. This, we expect, will help stimulate growth via the mobilisation of debt and equity capital market instruments,” Mr Bentsi-Enchill said.
“We will continue to leverage our excellent investment banking pedigree as well as the strength of our franchise in the Standard Bank Group, the largest financial institution in Africa, to consummate such big-ticket deals that will not only help businesses grow but also help deepen our markets, even as we tap into government’s industrialisation drive,” Mr Bentsi-Enchill added.
Group Chief Executive Officer of Dangote Cement Plc, Engineer Joseph Oyeyani Makoju, said the choice of Stanbic IBTC as a partner in the CP Programme was an easy one considering the financial institution’s strong pedigree and expertise in investment banking.
On the issuance, Mr Makoju stated that, “This landmark transaction is the largest-ever Commercial Paper issuance by a corporate issuer in Nigeria. It allows us to broaden our sources of funding and combine established bank lines of credit with access to capital market funding, which will lower our overall cost of borrowing.”
He added that, “The success of this programme reflects the high quality of our business and its strong cash generation, made possible by our market-leading positions in Nigeria and across Sub-Saharan Africa, where demand for cement is growing rapidly.”
The establishment of the Dangote Cement Plc Commercial Paper Programme is another testament to Stanbic IBTC Capital’s industry leadership in investment banking, issuing house and financial advisory services. The company has played a pivotal role in the resurgence of commercial paper in Nigeria following the release of guidelines on the issuance of the corporate debt financing solution by the Central Bank of Nigeria.
Dangote Cement was advised by Stanbic IBTC Capital Limited as sole Arranger and Dealer, Stanbic IBTC Bank PLC as Issuing Calculation and Paying Agent, Banwo & Ighodalo as Legal Counsel and Deloitte & Touche as Auditors to the Issuer.
Stanbic IBTC Capital Limited is a member of Stanbic IBTC Holdings PLC. Stanbic IBTC Holdings Plc, a member of Standard Bank Group, is a full service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management.
Standard Bank Group is the largest African bank by assets and market capitalization. It is rooted in Africa with strategic representation in 20 countries on the African continent.
The bank has been in operation for over 155 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Dipo Olowookere
For the fourth consecutive trading session, the Nigerian Exchange (NGX) Limited closed higher on Friday by 0.63 per cent on sustained renewed buying pressure.
Apart from the energy and industrial goods sectors which closed flat, every other sector ended in the green territory, according to data obtained from the bourse.
Business Post reports that the insurance index appreciated by 1.52 per cent, the banking space improved by 0.63 per cent, and the consumer goods counter expanded by 0.46 per cent.
As a result, the All-Share Index (ASI) gained 617.47 points to settle at 99,378.06 points compared with the preceding day’s 98,760.59 points and the market capitalisation went up by 375 billion to close at N60.242 trillion, in contrast to Thursday’s closing value of N59.867 trillion.
The volume of transactions on Customs Street yesterday grew by 11.13 per cent to 544.2 million shares from the 489.7 million shares transacted a day earlier.
The value of transactions increased during the session by 49.30 per cent to N10.6 billion from N7.1 billion and the number of deals went up by 1.93 per cent to 8,464 deals from the 8,304 deals posted in the previous trading session.
The busiest equity for the trading day was Japaul with the sale of 71.7 million units valued at N158.0 million, eTranzact exchanged 70.7 million units worth N477.5 million, Tantalizers sold 57.3 million units for N101.2 million, FCMB traded 33.0 million units worth N297.3 million, and Universal Insurance transacted 27.1 million units valued at N9.6 million.
A total of 36 stocks ended on the gainers’ chart, while 15 stocks finished on the losers’ table, indicating a positive market breadth index and strong investor sentiment.
The trio of Aradel Holdings, Ikeja Hotel and Caverton gained 10.00 per cent each to trade at N550.00, N8.80, and N1.98, respectively, as Africa Prudential rose by 9.87 per cent to N17.25 and Golden Guinea Breweries soared by 9.64 per cent to N8.64.
On the flip side, Austin Laz lost 10.00 per cent to close at N1.62, ABC Transport crashed by 8.00 per cent to N1.15, Royal Exchange slumped by 7.69 per cent to 60 Kobo, Secure Electronic Technology plunged by 5.26 per cent to 54 Kobo, and The Initiates crumbled by 4.26 per cent to N2.25.
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