Nigeria’s largest palm oil maker to raise record N100bn bond

Presco Plc, Nigeria’s biggest palm oil maker, is set to raise N100 billion in Series 1 of its N150 billion bond programme. This would mark the largest corporate bond issuance in the industry. The bond will have a 7-year tenure with a yield range of 23.25 percent to 23.75 percent.

Presco Plc boasts a strong credit profile, with an Aa rating from Agusto & Co. and an A- rating from GCR.

This bond issuance represents Presco Plc’s second venture into the capital market, following the successful raising of N34.5 billion in 2022 under Series 1 of its N50 billion issuance programme. That issuance was also a 7-year bond, carrying a coupon rate of 12.85 percent.

Before Presco’s latest issuance, some of the largest corporate bond offerings included Dangote Group’s N112.42 billion raise in December 2022 through its SPV, Dangote Industries Funding Plc, under Series 2 of its ₦300 billion Bond Issuance Programme. Similarly, MTN Nigeria secured ₦115 billion in September 2022 through Series 1 of its ₦200 billion bond issuance programme.

Read also: Presco outperforms peers on returns, operating margin

Amid Nigeria’s high-interest monetary environment since 2023, corporate issuers have increasingly turned to shorter-tenured commercial papers, enabling them to offer competitively high yield rates without the extended commitment of longer-term bonds. In 2024, corporate bond issuances in Nigeria totalled N69.37 billion, a significant decline compared to the ₦126 billion issued in 2023.

Presco Plc decision to raise N100 billion reflects a renewed confidence in Nigeria’s capital markets. This strategic move has the potential to positively influence corporate sentiment toward the capital markets, especially after 2024, when many corporations hesitated to tap into the market due to the high yields required to remain competitive.

Presco’s solid fundamentals for 2024 also positions the company as a standout player in Nigeria’s corporate landscape. With one of the highest returns on equity in the country in 2024 and a projected triple-digit growth in net profit, Presco is on a trajectory of robust financial performance, further reinforcing its appeal to institutional and individual investors.