Six Nigerian corporations issued corporate bonds totaling N246.28 billion in the half-year (H1) ending June 30, 2022, in an effort to strengthen their balance sheets and expand their operations as a result of the Nigerian capital market’s dormant primary equities segment.
Since the end of March 2007 until 2020, when the performing index rose by 50%, making Nigerian stock the best performing globally, the Nigerian equity market had been in a continuous nosedive with sporadic, futile recovery attempts.
Share prices have been declining for a while, and many investors are still calculating their losses.
As a result, the majority of businesses now turn to alternate methods of capital raising, looking for possibilities in the bond market while avoiding shares.
For instance, Dangote Cement generated N116 billion through the biggest corporate bond issue in the capital market’s history of Nigeria.
Under its N300 billion multi-instrument issuance program, the firm reported that it had finished the issue of N116 billion in series 2 fixed rate senior unsecured bonds.
A 5-year tranche A issuance priced at 11.85 percent, a 7-year tranche B issuance priced at 12.35 percent, and a 10-year tranche C issuance priced at 13 percent were the three tranches that made up the bond offering, according to the business.
According to the corporation, a wide range of institutional investors, including pension funds, asset managers, banks, insurance companies, and high-net-worth individuals, participated in the bond sale.
Additionally, it stated that the goal of the fundraising was to raise money for Dangote’s development plans.
The statement read, “The proceeds of the Bond Issuance will be used to support the Company’s projects for Nigerian development, short-term debt refinancing, and working capital requirements.”
Additionally, Presco Plc released a N34.5 billion corporate bond. As part of its N50 billion bond offering program, Presco Plc recently announced the issue of N34.5 billion in series 1 7-year fixed rate bonds.
In addition, Ardova Plc listed corporate bonds worth N25.3 billion. The listing of the Ardova Plc N11.44 billion tranche A and N13.86 billion tranche B Series 1 Fixed Rate Bonds under its N60.00 billion Bond Issuance Programme was recently approved by FMDQ Securities Exchange Limited’s Board Listings and Markets Committee.
The 7-year and 10-year tranches give Ardova the much-needed flexibility it needs to grow its operations and widen our geographic reach.
Additionally, Access Holdings recently disclosed the closing of green bonds valued at $50 million (N20.98 billion).
The bank declared that its $50 million (N20.98 billion) Reg S Step-Up Green Notes due 2027 were successfully closed in the international capital market.
This information was provided by the bank in a statement that was posted on the Nigerian Exchange Ltd. website (NGX).
The green bond was issued with a coupon of 5.50 percent for the first two years, which increases to 7.25 percent in the final three years until maturity (on the put option date), with interest due semi-annually in arrears. Following its initial Naira Green Bond issuance in 2019, this is Access Bank’s second Green Bond issue.