Dangote Cement N116bn Unsecured Bonds Get AA+ Ratings With Stable Outlooks

GCR Ratings has assigned a national scale long-term issuer rating of AA+ (NG) to Dangote Cement Plc.’s N116 billion series 2 tranches A, B and C senior unsecured corporate bonds with the outlook accorded as stable.

The net proceeds from the Bonds were said to be utilised for the company’s expansion projects in Nigeria, refinancing of short-term debts and working capital funding, according to the rating note.

Dangote Cement Plc, Africa’s leading integrated cement manufacturer and top member of Nigeria’s cement oligarch, has a combined installed capacity of 48.6 million tonnes per annum across ten countries.

GCR said it revised the cement company’s national scale long-term rating to AA+(NG) in April 2022, from AAA(NG) previously, and affirmed the short-term rating at A1+(NG), with the outlook accorded as stable.

The rating note explained that this followed the review of Dangote Industries Limited, the parent company, which created a group rating cap at the AA+(NG).

Recall that the cement company registered N300 billion Multi-Instrument Bond Programme with the Securities and Exchange Commission in May 2021, and subsequently raised an initial N50 billion in Series 1 (Tranches A-C) Senior Unsecured Bonds Issue.

GCR said that Dangote Cement Plc has now raised an additional N116 billion in Series 2 fixed rate senior unsecured bonds issued under the programme.

The capital raised tranche A at 11.85 per cent for N4.269 billion, with a tenor of five years, and maturity in April 2027. Also, the cement company gets N23.335 billion from tranche B priced at 12.35%, with a tenor of seven years, and maturity in April 2029,

From tranche C, the company raised N88.396 billion, with a tenor of ten years, and maturity in April 2032 priced at 13 per cent.

The stable outlook reflects GCR’s view of Dangote Cement Plc.’s robust earnings and strong cash flows, which serve to moderate the impact of any external shocks.