BUA Cement Plc, on Monday, said it has successfully concluded a N115bn Series 1 Fixed Rate Senior Unsecured Bond Issue under its maiden N200bn Bond Issuance Programme, the largest ever Corporate Bond issued in the Nigerian Debt Capital Markets.
An application, the company added in a statement, will be made to dual-list the Bonds on the relevant exchanges upon receipt of the necessary approvals.
BUA Cement’s N100bn Series 1, 7-years Issue priced at a competitive fixed rate of 7.5% and was oversubscribed to the tune of N137.82bn, with the company assuring that it will only utilize N115bn in line with regulatory guidelines.
Giving details of the issuance, the company explained that the bond which is due in 2027 was subscribed to the tune of N137.82bn; following which the Board approved the absorption of excess funds, not exceeding 15% of the offer, which translates to N15billion and N115bn in its entirety, in accordance with Rule 323(21) of the Securities & Exchange Commission Rules and Regulations, 2013.
Speaking on the significance and success of the Issue, Abdul Samad Rabiu, Chairman, BUA Cement described it as “the largest corporate bond offering in the history of Nigeria’s Debt Capital Markets.
“Last year, we made a strategic decision as a proudly Nigerian company to list BUA Cement on the Nigerian Stock Exchange. This was in line with our core strategy to continue seeking out viable investment and growth opportunities within Nigeria. This bond issuance -a first by BUA Cement, demonstrates our confidence in Nigeria’s debt capital markets as well as continued investor confidence in the BUA Cement business model, our management team, and long-term strategy, all supported by strong credit ratings. We remain committed to unlocking opportunities within the industry for Nigeria,” he stressed
The success of the first series in the Bond Issuance Programme, Engr. Yusuf Binji, Chief Executive Officer, BUA Cement added, underscore the strength of the BUA Cement brand, even as it “reiterates the strength and acceptance of the BUA Cement brand and the trust placed by stakeholders in the Company’s strong cash generation capacity, credit profile and strategy driven by a well experienced management team. Diversifying and extending the duration of our funding sources with the inclusion of this Bond, at a competitive rate, will further enable us to achieve our strategic objectives and vision.”
The BUA Cement Series 1 Bond, which has a 3-year moratorium, and will be amortised evenly from the fourth year, is embedded with a call option, exercisable only after 48 months from the issue date.
StanbicIBTC Capital Limited acted as Lead Issuing House/Bookrunner, with UCML Capital Limited and Tiddo Securities Limited, as Joint Issuing Houses/Bookrunners
The Issuer and the Issue were both assigned “A” rating (stable) by Agusto and “AA-” (stable) by DataPro, based on a stable, qualified, and experienced management team, strong industry potential, strategic market position, low exposure to credit risk, excellent business, and liquidity profile.
An application will be made to dual-list the bond on the Nigerian Stock Exchange (the NSE) and FMDQ Securities Exchange (FMDQ).
In another development, BUA recently announced its intention to increase its production capacity to 20 million metric tonnes per annum (mtpa) by 2022. In addition, its newest 3million mtpa plant in Sokoto currently undergoing construction is expected to be ready in 2021.
