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It should be recalled that Dangote Cement in 2020 announced the successful issuance of 100 billion Series 1 Fixed Rate Senior Unsecured Bonds due April 2025 under the Company’s 300 billion Bond Programme. The transaction was 1.5 times oversubscribed and represents Dangote Cement’s debut bond issuance in the debt capital markets.
Book building with respect to the issuance commenced on 3 April 2020 following approval from the Securities and Exchange Commission and closed on 15 April 2020 at a coupon rate of 12.50 percent.
Despite market headwinds due to the COVID-19 pandemic, the transaction was extremely well received and attracted significant demand from a wide range of high-quality investors including domestic pension funds, asset managers, insurance companies, banks and international fund managers. The total order book amounted to 155 billion.
The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets (as at time of issue), reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges.
The transaction enabled the Company to lower its average cost of debt and extend the average maturity of its debt. Dangote Cement intends to use the net proceeds of the offering to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.
GCR a founder member of Europe based ARC Ratings, is licensed as a rating agency in a number of markets, including Kenya with the Capital Markets Authority, Nigeria with the Securities and Exchange Commission, Zimbabwe with the Reserve Bank of Zimbabwe and Mauritius with the Financial Services Commission. GCR has since established itself as the leading rating agency in Africa, accounting for the majority of all ratings accorded on the African continent.
Dangote Cement is Africa’s leading cement producer with nearly 48.6Mta capacity across Africa. A fully integrated quarry-to-customer producer, we have a production capacity of 32.25Mta in our home market, Nigeria. Our Obajana plant in Kogi state, Nigeria, is the largest in Africa with 16.25Mta of capacity across five lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through our recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries.
In addition, we have operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).
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