FMDQ lists Dangote Cement’s $50bn Commercial Paper

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FMDQ OTC Securities Exchange has for the first time on its platform recorded the biggest Commercial Paper (CP) programme on the Nigeria debt capital market as it listed Dangote cement Plc’s N50billion papers.

The Commercial Paper comprised of N12.04 billion and N37.96 billion issuances underits 150 billion Commercial Paper Programme.  The company reputed to be the largest cement producer in Africa, recently, announced the issuance of 150 billion series one and two notes.

Speaking at the occasion, the Managing Director/Chief Executive FMDQ, Bola Onadele Koko, said that the various efforts by FMDQ to deepen the domestic capital market is yielding results.

Koko also expressed optimism that Dangote Cement will up the ante by listing a dollar-denominated commercial paper on its platform.

He said: “The listing couldn’t have been a better one because it is almost four years since I and some members of our staff travelled to Dangote Cement for the first time; then FMDQ was relatively unknown in the market and there was no Commercial Paper market and we wanted to make Commercial Paper market transparent and credible. In actual fact, this is now a Commercial Paper market.”

Also speaking, the Chief Executive Officer of  Dangote Cement Plc, Engr. Joseph Makoju, commended the FMDQ for organising the listing, adding that since inception, FMDQ has contributed significantly to the development of the domestic debt capital market in Nigeria.

Specifically, Commercial Papers are short-term debt financing securities with a duration not longer than 270 days in tenor and consists of unsecured and discounted promissory notes issued by large corporations with good credit ratings, which can be readily traded. Due to their relatively short maturity period, commercial papers are referred to as low-risk investments, offering competitive returns to investors in compensation for the issuer’s credit risk.

In another development, Dangote Cement has a few weeks ago announced that it wanted to raise a ₦300 billion ($833 million) local-currency bond. The company also plans to raise $500 million by the issuance of a Eurobond.

Impeccable sources close to Dangote Cement hinted that company intends to spend heavily on expansion, with $350 million earmarked for capital projects this year.

This includes the building of export facilities at Nigeria’s seaports to boost shipments to neighbouring West African countries.

However, the local debts currently being raised may be used to repay some of its trade-related debts.

 

 




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