Dangote Cement raises N50bn debt to fund short term liabilities

Dangote Cement Plc has launched its Series 17 and 18 commercial paper in an effort to raise N50 billion under its N150 billion CP Issuance Programme.

Typically, an unsecured debt instrument, a commercial paper is issued by corporates to bridge funding gap or meet short-term liabilities varying from payroll financing to accounts payable and inventories.

The offer, which opened on Monday, is scheduled to close on Thursday 3rd September.

While the Series 17 CP has a tenor of 177 days, a 4 per cent yield and a maturity date of 4th March 2021, the Series 18 CP’s tenor is 268 days with a yield of 5 per cent and a maturity date of 3rd June 2021.

Read also: NSE: Dangote Cement, Vitafoam, UACN drive N35bn loss

The proceeds of the debt-raising exercise will be used “to fund short-term working capital requirements and for general corporate purposes,” the company’s offer document said.

Dangote Cement, which is sub-Saharan Africa’s biggest cement maker, raised N100 billion through corporate bond in April for working capital purpose and refinancing current short-term debt that was previously raised for some expansion projects.

The company has been assigned Aa2.ng long-term rating by Moody’s and AA+ long-term rating by GCR.

The minimum subscription for the commercial programme offer is N5 million.

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