InfraCredit Guarantees N12bn 10-Year Infrastructure Bond For Transport Firm

InfraCredit, an ‘AAA’ rated specialized infrastructure credit guarantee institution, on Tuesday said it has guaranteed the N12bn 10-Year Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds of logistics giant- Transport Services Limited (TSL), due 2030 under its N50bn Debt Issuance Programme.

With the support of InfraCredit’s guarantee, the Series 1 Bonds of TSL, co-founded by Ayodeji Wright and Wale Fatoki to offer fully integrated transport and logistics services that deliver value-added logistics and distribution services, was accorded a ‘AAA’ long term credit rating by Agustoand Co. and DataPro Limited, reflecting the high degree of creditworthiness and the strong credit quality.

The transaction was oversubscribed by 73.2% with firm commitments from 18 institutional investors, including 11 domestic pension funds, just as it is the first 10-year bond issuance by any company in the transportation and logistics sector.

The bond proceed is to refinance TSL’s short-term loans to match its long-term fixed rate debt that will sustainably support consistent business growth and expansion plans of the company that offers a wide range of corporate and retail clientele in industries such as agro-processing, fast moving consumer goods (FMCG), oil and gas, as well as cement, amongst others under fixed term contracts. The company operates a fleet of over 840 vehicles covering 40 approved inter-state routes across multiple locations in Nigeria.

Ayodeji Wright, MD, TSL

A statement by the Chief Executive of TSL, Ayodeji Wright, explained that the Bond was conceived a few years ago, expressing profound gratitude “to the entire Project 4 Transaction Parties, TSL Bond Investors and the Regulators, who have made this become a reality today.

“The successful issuance of the Bond is attributable to our relentless and collaborative efforts, underscored by our track record of excellence in 19 years of existence as an indigenous logistics and evolving mobility company. Today, TSL remains committed to delivering its vision of providing bespoke supply chain and logistics solutions within Nigeria, and to sub-Saharan Africa.

“The TSL Bonds will undoubtedly be the springboard to provide the financial reinforcement to our business strategy, strong operating model and will, in turn, stimulate an atmosphere for a profitable growth over the next decade,” he stressed.

Azubuike, CEO, InfraCredit

Also commenting, the CEO of InfraCredit, Chinua Azubike, said “despite challenges brought about by the recent COVID-19 pandemic, this achievement demonstrates InfraCredit’s continuing support for inclusive access to long term local currency finance for infrastructure development, and the deepening of the domestic debt capital markets with good quality asset classes for domestic investors.

“TSL, over its 19-year history, has built a strong pedigree as ahighly experienced and innovative transport and logistics service provider particularly in safety, maintenance, and journey administration. As we expand and diversify our guarantee portfolio to the transportation sector and given the importance of transport infrastructure to Nigeria’s economic recovery, we believe that our role remains vital in enabling businesses to deliver more essential infrastructure that can drive a clear and sustainable development impact on economic activities as well as improve the livelihoods of Nigerians,” he added.

Stanbic IBTC Capital Limited and ARM Securities Limited acted as joint Issuing Houses/Bookrunners for the transaction.