By Dipo Olowookere
The bookbuild for the N100 billion worth of Dangote Cement bonds is closing today, Thursday, April 29, 2021.
The notes are being offered in three tranches and are under the N300 billion debt programme of the leading cement company in Africa.
Business Post gathered that the sales opened on Friday, April 23, 2021, and investors have been given the option of buying the 3-year, 5-year and 7-year notes.
But the cement giant said it may increase the value of the papers to N300 billion from N100 billion, depending on the interest of investors.
In the price guidance given by the investment bank in charge of the exercise, the Tranche A with a 3-year tenor has a coupon rate of 10.7 per cent to 11.25 per cent.
The Tranche B with a 5-year maturity has a coupon between 12.30 per cent and 12.50 per cent, while the Tranche C with a 7-year tenor has a coupon range of 12.75 per cent to 13.00 per cent.
It was stated that the Tranche C bond may be called partially or wholly at par on any coupon date after 48 months from the issue date
Interested investors were asked to buy a minimum of 10,000 units at N1,000 each, amounting to N10 million and multiples of N1,000 thereafter.
Business Post learned that Dangote Cement is raising these funds to use for its expansion projects, refinance existing short-term debt and for general corporate purposes
Dangote Cement is one of the most capitalised companies listed on the Nigerian Exchange (NGX) with a value of over N3.7 trillion. It has a combined installed capacity of 48.6Mta across its operations in 10 African countries.
The organisation boasts of a strong track record in the Nigerian debt capital markets, having successfully issued both short and long term debt.
In April 2020, Dangote Cement issued a N100 billion 5-year fixed-rate bond which was the largest corporate bond issuance in the history of the Nigerian debt capital markets at the time.
This series 1 fixed rate bond is the only corporate bond at AAA rating in Nigeria by GCR. In addition, the cement firm has also issued an aggregate of N450 billion in commercial papers since 2018.
It has consistently reported robust operating and net profit margins compared to its peers in Sub-Saharan Africa and in other jurisdictions. The company has adequate working capital, satisfactory cash flow, and a very experienced management team.
Adedapo Adesanya