A Corporate Benchmark At Last
…as FMDQ Admits the ₦50.00 billion Dangote Cement CPs on its Platform
Great news for the Nigerian debt markets as the establishment of a corporate benchmark for the short-end of the debt curve looks set to becoming a possibility! In another note-worthy and commendable event in the FMDQ markets, the Dangote Group, known to be the largest indigenous industrial conglomerate in Sub-Saharan Africa, through its subsidiary, Dangote Cement PLC, Africa’s largest cement producer, successfully raised from the Nigerian Commercial Paper (CP) market, ₦50.00 billion worth of CP notes. With due diligence provided by its Board Listings, Markets and Technology Committee, FMDQ OTC Securities Exchange (“FMDQ” or “the OTC Exchange”) admitted on its platform, the largest CP issuance by a non-financial institution – the Dangote Cement PLC ₦50.00 billion Series 1 & 2 CP Notes under its ₦150.00 billion Domestic CP Issuance Programme. Following the resuscitation of the Nigerian CP market by FMDQ in 2014, transparency, price discovery, liquidity, efficient quotation processes, amongst others, have been established in the market, paving the way for issuers and investors to effectively and sustainably meet their funding needs, as well as contribute to the development of the nation’s debt markets.
To commemorate this remarkable and historic feat, a most prestigious Ceremony was held at the offices of the OTC Exchange on Thursday, July 19, 2018. Present at the well-organised Ceremony were the Group Chief Executive Officer, Dangote Cement PLC, Mr. Joseph Makoju, Group Chief Financial Officer, Dangote Cement PLC, Mr. Brian Egan, along with other key representatives from Dangote Cement PLC. Also present at the Ceremony were the Chief Executive Officer, Stanbic IBTC Bank PLC, Dr. Demola Sogunle, Chief Executive Officer, Stanbic IBTC Capital Limited, Mr. Funso Akere with other key representatives from Stanbic IBTC Capital Limited, the sponsor of the issue and Registration Member (Quotations) of FMDQ and other representatives from Banwo & Ighodalo, Deloitte and Touche, amongst others.
Welcoming the guests to the Ceremony, Ms. Tumi Sekoni, Directorate Head, Capital Markets, FMDQ, commended the issuer and sponsor of the issue for achieving this milestone, noting that their decision to raise funds from the debt markets was testament to the restoration of confidence in the Nigerian CP market, which had been marked by an extended period of dearth of activity, significantly weakened issuer interest and diminished investor confidence. She further commented that the issuance would encourage other corporates and commercial entities to effectively tap the potential burgeoning CP market to finance their short-term funding needs, thereby adding more depth and breadth of the Nigerian debt capital markets (DCM). She concluded by adding that the quotation of the CPs would undoubtedly pave the way for the establishment of a globally recognised non-financial corporate benchmark for the Nigerian CP market, owing to the associated rating and reputation garnered by the Dangote conglomerate and encouraged the issuer to continue to tap the debt markets to ensure the actualisation of the desire for a corporate benchmark in the Nigerian debt markets.
Mr. Joseph Makoju, Group Chief Executive Officer of the Dangote Cement PLC, during the issuer’s special address, stated, “this is the largest Commercial Paper issuance of any Nigerian company and we are delighted to list it on FMDQ, which has significantly contributed to the development of the domestic debt capital market in Nigeria. By promoting transparency, governance, integrity and efficiency in the CP market, FMDQ is encouraging issuers like ourselves to explore alternative funding sources in the Nigerian capital markets.”
Delivering the Registration Member (Quotations) remarks, Mr. Kobby Bentsi-Enchill, Executive Director and Head, Debt Capital Markets, reaffirmed Stanbic IBTC Group’s commitment towards contributing to development of a world class capital market in Nigeria. “the domestic capital markets are gradually deepening and growing in sophistication, as prospective issuers become aware of the various financing options available to them via the capital markets. This is evidenced by the decision of Dangote Cement PLC to tap the CP market, being their inaugural issuance in the Nigerian DCM. At Stanbic IBTC, we partner with our clients to deliver holistic, innovative and cutting-edge financial solutions that help them to achieve their funding objectives. In doing so, we are able to bring the full weight of our franchise to support our clients, enabling them to achieve a transformed business and customer service experience.”
Mr. Bola Onadele. Koko, Managing Director/CEO of FMDQ, whilst giving the closing remarks, applauded the issuer for the remarkable step taken and commented that, “the entry of the Dangote Group to the Nigerian DCM, will not only re-ignite the appetite of local and foreign portfolio investors in the debt markets but is a very welcome development, as the criticality of the implementation of the Basel III regulations framework to strengthen the risk management of banks lays credence to the urgent need for financial market participants (corporates, governments etc.) to effectively tap the debt markets for their funding needs. He further commented that FMDQ shall continue to promote market development in collaboration with the stakeholders, to make the markets within its purview globally competitive and well-aligned to support economic growth and development for the benefit of the citizenry.