Lafarge Africa raises N60b in Nigeria’s largest corporate bond

Lafarge Africa Plc, Nigeria’s sixth largest quoted company, has raised N60 billion in two series of a bond issue, making history as the largest corporate bond issue in the Nigerian capital market.

Lafarge Africa today announced the conclusion of its Series I and II N60 billion bond issuance, comprising of a series one of N26.39 billion three-year 14.25 per cent bond due 2019 series two of a N33. 61 billion five-year tenured 14.75 per cent bond due 2021.

The dual-series issuance, the first of its kind and largest ever bond issuance by a corporate in Nigeria’s debt capital markets, was concluded following a book build, with the order book oversubscribed.

This is Lafarge Africa’s second bond issuance in the Nigerian capital markets, having previously issued a N11.8 billion three-year fixed rate bond in 2011.

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Group managing director, Lafarge Africa, Michel Puchercos, said the net proceeds of the bond issue will be used to part-refinance the debt of the group’s wholly-owned subsidiary, United Cement Company of Nigeria Limited (Unicem).

“These proceeds will deliver savings in financing costs to Unicem and Lafarge Africa. Unicem is currently undergoing a 2.5mtpa capacity expansion which will be completed by the end of 2016,” Puchercos said.

Chairman, Lafarge Africa Plc, Mr. Bolaji Balogun, said the largest-ever bond issuance by a corporate in Nigeria’s capital markets affirms Lafarge Africa’s reputation as a prime issuer.

“We are grateful for the overwhelming support we have received from domestic institutional investors, especially the Nigerian pension funds. We also wish to thank the SEC for its support on the completion of the transaction,” Balogun said.

Lafarge Africa has 12mtpa of cement capacity and it is expected to add 2.5mtpa of capacity in the second half of this year.

A signing ceremony in respect of the Series I and Series II bonds has been held following approval of the Securities & Exchange Commission (SEC). The bonds will be listed on FMDQ-OTC. Chapel Hill Denham acted as Lead Financial Adviser, Lead Issuing House and Lead Book Runner on the transaction. Citibank Nigeria acted as Joint Lead Financial Adviser and Book Runner with Standard Chartered and Stanbic IBTC as Joint Issuing Houses and Book Runners.

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