Stanbic IBTC assists Dangote Cement with new Commercial Paper offering


Stanbic IBTC Capital and Stanbic IBTC Bank, subsidiaries of Stanbic IBTC Holdings PLC, have partnered with Dangote Cement PLC (“Dangote Cement” or the “Company”), Africa’s largest cement producer, to conclude yet another issuance of N50 billion Series 3 and 4 Notes, under the recently established Dangote Cement PLC’s N150 billion CP Programme. Issuance of the Series 3 and 4 Notes closed on Friday 17 August 2018.

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Stanbic IBTC Capital is Sole Arranger of the CP Programme, and acted as Joint Dealer for the Series 3 and 4 Notes, whilst Stanbic IBTC Bank is the

Issuing, Calculation and Paying Agent for all Notes issued under Programme. The Series 3 and 4 Notes will be listed on Nigeria’s FMDQ OTC Securities Exchange.

Reflective of Dangote Cement’s top-notch ratings (Aaa/AA+ by Moody’s/GCR), the Series 3 (180-day) and 4 (270-day) notes priced at thin spreads of 25 and 50 basis points over the chosen primary market Sovereign benchmark (OMO rate), to achieve discount rates of 12.40% and 12.65% respectively. The N50 billon offering was 158% subscribed, with a robust and high quality order book closing at N79 billion. The order book featured bids from a diversified pool of funds managed by Pension Fund Administrators, Asset Managers, Insurance Companies, Trustees, Registrars, Corporate Treasuries and Private Bank HNI clients. Thus, the level of oversubscription generated from a high quality and diverse order book, also validates DCP’s rich non-bank investor base, achieved through the Company’s strategic efforts to broaden and diversify its funding sources.

Funds raised in the CP Programme are to be used the Company’s working capital and general corporate purposes.

Speaking in relation to the highly successful offering, Kobby Bentsi-Enchill, the Executive Director and Head, Debt Capital Markets, Stanbic IBTC Capital, expressed delight that Dangote Cement was able to achieve yet another landmark CP issuance, within 6 weeks of its inaugural offering. 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 our clients with high quality advisory and arranging services that enhances 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 that support our clients 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,” 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 capital markets” Bentsi-Enchill added.

The Group Chief Executive Officer, Dangote Cement PLC, Engineer Joseph Oyeyani Makoju, expressed the Company’s satisfaction with the choice of Stanbic IBTC as a preferred partner, considering the financial institution’s strong pedigree and expertise in investment banking. On the issuance, Makoju stated: “This landmark transaction, even more impressive than our first outing, remains still the largest-ever Commercial Paper issuance by a corporate issuer in Nigeria. In addition to helping us achieve our strategic objective of broadening our sources of funding, we have also made remarkable strides towards lowering our overall cost of borrowing.” Makoju added: “The success of this Programme reflects the high quality of our business and its strong cash generation capacity, 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. Stanbic IBTC 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 for the CP Programme, and Joint Dealer in respect of the Series 3 and 4 Notes, whereas Stanbic IBTC Bank PLC acts as the Issuing Calculation and Paying Agent for all Notes issued under the Programme.

Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.


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