The dormant primary equities segment of the Nigerian capital market has prompted listed companies to rely on the bond market for fund raising as six Nigerian companies issued corporate bonds worth N246.28 billion in order to improve their balance sheet and scale up their operations during the half-year (H1) ended June 30, 2022.
The Nigerian equities market has been on a continuous nose-dive with occasional, unsuccessful recovery attempts since the end of March 2007 till 2020 when the performing index soared by 50 per cent, making Nigerian stock the best performing globally.
For quite a while now, prices of shares have been falling and many investors are still counting their losses.
Consequently, most companies now resort to alternative means of raising capital, exploring opportunities in the bond market while shunning equities.
For instance, Dangote Cement raised N116 billion from the largest corporate bond issuance in the history of the Nigerian capital market.
The firm announced that it has completed the issuance of N116 billion series 2 fixed rate senior unsecured bonds under its N300 billion multi-instrument issuance programme.
According to the company, the bond issuance comprised three tranches: a 5-year tranche A issuance priced at 11.85 per cent, a 7-year tranche B issuance priced at 12.35 per cent, and a 10-year tranche C issuance priced at 13.00 per cent.
The company said that the bond issuance attracted participation from a wide array of institutional investors, including pension funds, asset managers, banks, insurance companies and high-net-worth individuals.
It also stated that the objective of the fundraising was to finance Dangote’s expansion projects.
It said, “The proceeds of the Bond Issuance will be used to finance the Company’s Nigeria expansion projects, short-term debt refinancing and working capital requirements.”
Presco Plc also issued a N34.5 billion corporate bond. Presco Plc recently announced the issuance of N34.5 billion series 1 7-year fixed rate bonds under its N50 billion-bond issuance programme.
Also, Ardova Plc listed N25.3 billion corporate bonds. FMDQ Securities Exchange Limited through its Board Listings and Markets Committee recently admitted 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 on its platform.
The 7-year and 10-year tranches provide Ardova with the much-needed flexibility to expand its operations and increase our footprint across the country.
Furthermore, Access Holdings recently announced closure of $50 million (N20.98 billion) green bonds.
The bank announced the successful closure of its $50 million (N20.98 billion) Reg S Step-Up Green Notes due 2027 in the international capital market.
The bank disclosed this in a statement made available on the website of the Nigerian Exchange Ltd. (NGX).Source:
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