FMDQ Exchange Lists BUA Cement Plc’s N115bn Bond

•Issuance largest corporate bond in debt capital market

Goddy Egene

FMDQ Securities Exchange Limited has admitted BUA Cement Plc’s N115 billion Series 1 Fixed Rate Senior Unsecured Bond under its N200 billion Bond Issuance Programme for listing.

This issuance, a first by BUA Cement Plc becomes the largest corporate bond issued in the Nigerian debt capital markets (DCM). The proceeds from the issuance, according to the company, will be used to refinance existing debt obligations of the issuer, finance the issuer’s working capital as well as fund its Debt Service Reserve Account.
BUA Cement is the second largest cement producer in Nigeria and the largest cement producer in the North-west region of the country.

Commenting on the significant and successful issuance of the bond, the Chairman, BUA Cement, Abdul Samad Rabiu, said: “This is the largest corporate bond issue in the history of Nigeria’s DCM. In 2020, we made a strategic decision as a proudly Nigerian company to list the shares of BUA Cement.

“This was in line with our core strategy to continue seeking out viable investment and growth opportunities within Nigeria. This bond issue – a first by BUA Cement, demonstrates our confidence in the Nigerian DCM as well as continued investor confidence in BUA Cement’s 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.”

Also speaking, the Chief Executive Officer, BUA Cement, Engineer Yusuf Binji, said: “The success of the bond issue underscores the strength of BUA Cement’s brand. The transaction, being the largest corporate bond issuance in the history of Nigeria’s DCM reiterates the strength and acceptance of BUA Cement’s 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.

He explained that diversifying and extending the duration of their funding sources with the inclusion of this bond, at a competitive rate, would further enable them to achieve their strategic objectives and vision.

“We also have confidence in FMDQ Exchange, hence our decision to list the Bond on the Exchange. BUA Cement is profoundly grateful to the entire transaction parties, the bondholders and the regulators, who have made this become a reality today,” Binji said.

The Head, Debt Capital Markets, Stanbic IBTC Capital Limited – sponsor of the bond on FMDQ Exchange, Tokunbo Aturamu expressed his delight at the successful issuance and listing of BUA Cement’s N115.00 billion 7.50 per cent 7-year Fixed Rate Series 1 Bond.

He noted that this is the largest ever bond issued by a corporate issuer in the history of the Nigerian capital markets and thanked the investor community for their overwhelming support of the bond issue and BUA Cement, as evidenced by an over-subscription level of 38 per cent.

Aturamu commended BUA Cement for embracing the DCM as a complementary source of raising financing and expressed his appreciation to the board and management of BUA Cement for the opportunity given to Stanbic IBTC Capital to act as the lead issuing house to the landmark bond issue.

According to the FMDQ Exchange, the admission of the BUA Cement bond is reflective of the potential of the Nigerian DCM and the commendable level of confidence demonstrated by both issuer and investors and validates the efficient processes and integrated systems through which FMDQ Holdings PLC (“FMDQ Group” or “FMDQ”), via its subsidiaries, has sustained its service delivery to the market and its diverse stakeholders.

“The BUA Cement Bond, like all other securities listed, quoted, and traded on the FMDQ Exchange platform, shall be availed global visibility through FMDQ Exchange’s website and systems, transparency through its inclusion in the FMDQ Daily Quotations List, governance and continuous information disclosure to protect investor interest, and credible price formation, amongst other benefits derived from its preferred admission on the FMDQ Exchange platform.

“The BUA Cement Bond also lodged on FMDQ Depository will be availed efficient and seamless issue admittance and distribution, and accurate record-keeping platform, as well as efficient value chain linkages guaranteed by FMDQ’s vertically integrated structure (Exchange, Clearing & Depository), amongst other value-added services,” the exchange said.