N115bn Issue: BUA completes largest corporate bond

By Nkiruka Nnorom

BUA Cement Plc has successfully concluded its  Series-1 fixed rate senior unsecured bond issue  under its maiden N200 billion bond issuance programme.

With this development, BUA Cement’s Series-1 bond has become the largest ever corporate bond issued in the Nigerian debt capital market and signposts growing investor confidence in Nigeria’s second largest cement company.

According to the company, an application would be made to dual-list the bonds on the relevant exchanges upon receipt of the necessary approvals.

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The company had offered N100 billion for subscription but the issue was over-subscribed to the tune of N137.82 billion, a 37.82 percent over-subscription level. Meanwhile, the company’s Board of Directors has approved  the absorption of excess funds, not exceeding 15 percent of the offer value, as only  N115 billion would be utilised in line with regulatory guidelines.

Speaking on the significance and success of the issuance programme, Abdul Samad Rabiu, Chairman, BUA Cement, said, “This is the largest corporate bond offering in the history of Nigeria’s debt capital market. Last year, we made a strategic decision as a proudly Nigerian company to list BUA Cement on the Nigerian Stock Exchange. This was in line with our core strategy to continue seeking out viable investment and growth opportunities within Nigeria.

“This bond issuance, a first by BUA Cement,  demonstrates our confidence in Nigeria’s debt capital market as well as continued investor confidence in the BUA Cement business model, our management team, and long-term strategy, all supported by strong credit ratings. We remain committed to unlocking opportunities within the industry for Nigeria.”

In his comments, Engr. Yusuf Binji, Chief Executive Officer, BUA Cement, said: “The transaction, being the largest corporate bond issuance in the history of Nigeria’s debt capital markets, reiterates the strength and acceptance of the BUA Cement brand and the trust placed by stakeholders in the company’s strong cash generation capacity, credit profile and strategy driven by a well experienced management team. “Diversifying and extending the duration of our funding sources with the inclusion of this bond, at a competitive rate, will further enable us to achieve our strategic objectives and vision.”

The BUA Cement Series-1 Bond,  which has a 3-year moratorium period and to be amortised evenly from year 4, is embedded with a call option, exercisable only after 48 months from the issue date.

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