Axxela’s N12bn Series 1, others increase bonds’ value by N175bn

With the listing of Axxela’s N11.5 billion bond last week, the value of the newly listed bonds in 2020 has increased by additional N175.2 billion.

The Nigerian Stock Exchange (NSE) on July 16, 2020 listed on its main board Axxela Funding 1 Plc’s N11.5 billion Series 1, 14.30% fixed rate bond due 2027, which is part of Axxela’s N50 billion bond issuance program on the Nigerian Stock Exchange. The bond was issued on May 20, 2020 with maturity date on 20 May 2027 having a tenor of seven years. The coming on board of this fixed income instrument has further deepened the nation’s capital market as investors and other stakeholders now have more instruments to enhance their portfolio mix.

Notwithstanding the Covid 19 that is ravaging the global economy, the bond wing of the Nigerian Stock Exchange (NSE) has remained very active with the listing of a number of corporate bonds between January and July 2020. The list of the newly listed bonds includes Interswitch’s N30 billion bond; LAPO Microfinance Bank’s N6.2 billion bond; the 900,000 units of the NewGold ETF worth N7 billion; Dangote Cement Plc’s N100 billion bond; FBNQuest Merchant Bank ‘s N5 billion Series 1 bond while Access Bank listed its N15 billion Green Bond on both the NSE and the Luxembourg Stock Exchange. The bond market capitalisation of the NSE now constitutes the largest component of the Nigerian bourse.

Axxela Limited is a portfolio company with a vision of becoming the preferred and fastest-growing gas & power firm in Sub-Saharan Africa. It is a Helios Investment Partners LLP portfolio company, and a designated natural gas shipper on the West African Gas Pipeline (WAGP). The company is also the pioneering private sector-led developer of natural gas distribution in Nigeria, delivering at peak 80 million standard cubic feet per day to over 180 industrial and commercial customers via a vast network of gas infrastructure with strategic diversification plans including a ramp up of its gas supply and trading activities across West Africa, alongside the build out of key power and virtual pipeline infrastructure.

The book building process for the Axxela’s offer opened on March 27, 2020 and closed on May 11, 2020, having Afrinvest Securities Limited as the stockbroker to the offer.

The Series 1 Bonds that were issued by Axxela Funding 1 Plc is a special purpose funding vehicle and a wholly-owned subsidiary of Axxela Limited. The nominal value of the inaugural issuance was initially N10 billion, but when the offer closed in March 2020, it was oversubscribed by 24 percent which brought the final value to N11.5 billion. That was really a good news to the company and a confirmation of its acceptance by investors in Sub Saharan Africa.

“Our milestone debut market entry underpins the necessary symbiosis between private entities and debt capital markets. We appreciate the support of all corporates, professional parties, and investors involved in the ratification and issuance process. The favourable response indicates the level of investor confidence in our company’s reputation, brand, and performance.

“This funding will support our multi-pronged growth strategy of optimising our operations and assets, expanding our footprint, and revolutionising the midstream sector. As a prime portfolio company with demonstrated leadership within the sector, we remain uniquely positioned to satisfy the growing natural gas and energy demand across the sub-region” , Bolaji Osunsanya, Axxela’s Chief Executive Officer, said after the close of the offer in March 2020.