Julius Berger Nigeria Plc has successfully completed its N30billion Series 1 and 2 Commercial Paper (CP) issuance which is the company’s debut issuance in Nigeria’s fixed income market.
The CP issuance comprised two tenors – a 182-day Series 1 issuance which priced at a 14percent yield and a 267-day Series 2 issuance which was priced at a 15percent yield. The Commercial Paper will be quoted on the FMDQ Securities Exchange.
The CP issuance was 2.3 time subscribed demonstrating strong investor confidence in the management and vision of the Company. The Commercial Paper issuance attracted significant demand from a wide range of investors including pension fund administrators, asset managers, insurance companies, banks and high net-worth individuals.
Julius Berger said proceeds of the CP issuance will be used for the purpose of supporting its short-term working capital and funding requirements, thus further strengthening its competitive advantage in the construction sector in Nigeria and its financial flexibility as the Company implements its strategic initiative to diversify into economically significant sectors starting with the launch of its cashew processing business.
Stanbic IBTC Capital Limited acted as Lead Arranger/Issuing and Placing Agent (IPA) while FCMB Capital Markets Limited (FCMB Capital Markets) acted as Joint Arranger/IPA.
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Commenting on the significance and success of the CP issuance, Lars Richter, the Managing Director, Julius Berger Nigeria Plc said: “Julius Berger is delighted to have successfully completed its debut CP Issuance in the Nigerian fixed income market. This is truly a testament to the Company’s strength, the sustainability of its brand and the level of confidence Nigeria places in the Company’s services. It is without doubt that the success of this issuance provides an avenue to optimize our funding cost while continuing to drive our strategic initiatives as an organisation. We are pleased by the success of the CP Issuance and grateful to the investor community for supporting the transaction.”
Also speaking on the successful debut issuance, Funso Akere, Chief Executive of Stanbic IBTC Capital said: “Stanbic IBTC Capital is delighted to have acted as Lead Arranger/IPA to Julius Berger’s debut CP Issuance. As the leading investment banking franchise in Nigeria, we pride ourselves in bringing new issuers to the fixed income and debt capital markets.
“Julius Berger has a rich history and pedigree in Nigeria, having commenced operations in 1965, and the CP Issuance availed the Nigerian investor community an opportunity to gain exposure to a top-quality corporate in the construction and infrastructure sector, thus diversifying their investment portfolios.
“The CP issuance also allowed Julius Berger diversify its funding sources and reduce its overall funding costs. We thank the Board and management of Julius Berger for giving Stanbic IBTC Capital a free hand to guide the process to a successful completion.”
Also speaking, FCMB Capital Markets Limited, through Ikechukwu Omeruah, head, debt solutions, stated: “FCMB Capital Markets Limited is pleased to have acted as Co-Arranger and Dealer to the successful issuance of Julius Berger Nigeria Plc’s N30 billion Series 1&2 Commercial Paper (CP).
“The Julius Berger CP issuance was well received by the domestic investor community; reflected by a substantially oversubscribed order book made up of a very diverse universe of investors.
“This result is a testament to the quality and equity of the Julius Berger brand. FCMB Capital Markets is appreciative of the opportunity to partner with Julius Berger Nigeria Plc in successfully establishing the proof of concept of another channel of funding for the Company’s working capital requirements”.
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