FMDQ Exchange welcomes BUA Cement’s N115bn bond, largest in Nigerian debt market

In a remarkable feat that validates the innovative and credible capital market solutions, championed and delivered by FMDQ Securities Exchange Limited, the Exchange has admitted the BUA Cement Plc’s N115 billion series 1 fixed rate senior unsecured bond under its N200 billion Bond Issuance Programme for listing on its platform. The listing has been by the Board Listings and Markets Committee of the Exchange.

This issuance, a first by BAU Cement Plc, is the largest corporate bond issued in the Nigerian debt capital markets (DCM). The proceeds from the issuance will be used to refinance existing debt obligations of the issuer, finance the issuer’s working capital as well as fund its debt service reserve account.

BUA Cement, a publicly listed company, is the second largest cement producer in Nigeria and the largest cement producer in the North Western region of the country.

Speaking on the significant and successful issuance of the bond, Abdul Samad Rabiu, chairman, BUA Cement stated “this is the largest corporate bond issue in the history of Nigeria’s DCM. In 2020, we made a strategic decision as a proudly Nigerian company to list the shares of BUA Cement. This was in line with our core strategy to continue seeking out viable investment and growth opportunities within Nigeria. This bond issue – a first by BUA Cement, demonstrates our confidence in the Nigerian DCM as well as continued investor confidence in BUA Cement’s business model, our management team, and long-term strategy, all supported by strong credit ratings. We remain committed to unlocking opportunities within the industry for Nigeria”.

Yusuf Binji, CEO, BUA Cement also said that “the success of the bond issue underscores the strength of BUA Cement’s brand. The transaction, being the largest corporate bond issuance in the history of Nigeria’s DCM, reiterates the strength and acceptance of BUA Cement’s brand and the trust placed by stakeholders in the company’s strong cash generation capacity, credit profile and strategy driven by a well experienced management team. Diversifying and extending the duration of our funding sources with the inclusion of this bond, at a competitive rate, will further enable us to achieve our strategic objectives and vision. We also have confidence in FMDQ Exchange, hence our decision to list the bond on the Exchange. BUA Cement is profoundly grateful to the entire transaction parties, the bondholders and the regulators, who have made this to become a reality today.”

Tokunbo Aturamu, head, debt capital markets, Stanbic IBTC Capital Limited – sponsor of the bond on FMDQ Exchange and registration member (Listing) of the Exchange, expressed delight at the successful issuance and listing of the BUA Cement’s N115 billion 7.50 percent 7-year Fixed Rate Series 1 Bond. He noted this was the largest ever by a corporate issuer in the history of the Nigerian capital market and thanked the investor community for their overwhelming support of the bond issue as evidenced by an over-subscription level of 38 percent.

Aturamu commended BUA Cement for embracing the DCM as a complementary source of raising financing and expressed his appreciation to the board and management of BUA Cement for the opportunity given to Stanbic IBTC Capital to act as the Lead Issuing House to the landmark bond issue. He also commended the other Issuing Houses, UCML Capital Limited and Tiddo Securities Limited, for the important role they played in the success of the bond issue.

The admission of this bond to FMDQ Exchange is reflective of the potential of the Nigerian DCM and the commendable level of confidence demonstrated by both issuer and investors and validates the efficient processes and integrated systems through which FMDQ Holdings Plc (“FMDQ Group” or “FMDQ”), via its subsidiaries – FMDQ Exchange, FMDQ Clear Limited (“FMDQ Clear”), FMDQ Depository Limited (“FMDQ Depository”) – has sustained its service delivery to the market and its diverse stakeholders.

The BUA Cement Bond, like all other securities listed, quoted, and traded on the FMDQ Exchange platform, shall be availed global visibility through FMDQ Exchange’s website and systems, transparency through its inclusion in the FMDQ Daily Quotations List, governance and continuous information disclosure to protect investor interest, and credible price formation, amongst other benefits derived from its preferred admission on the FMDQ Exchange platform. The BUA Cement Bond, also lodged on FMDQ Depository, will be availed efficient and seamless issue admittance and distribution, an accurate record-keeping platform, as well as efficient value chain linkages guaranteed by FMDQ’s vertically integrated structure (Exchange, Clearing & Depository), among other value-added services.

FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group which provides a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement, depository and data and information services for the Nigerian financial market, towards making it globally competitive, operationally excellent, liquid and diverse, in line with its GOLD agenda.