Dangote Cement Plc has bagged AA+(NG) and A1+(NG) ratings from Global Credit Ratings(GCR). GCR, in its notice affirmed the long-term and short-term national scale issuer ratings of AA+ (NG) and A1+(NG) respectively, and assigned to Dangote Cement Plc, as well as with the outlook accorded as Stable.
In addition, the cement firm’s N100bn Series 1 Fixed Rate Bond has been assigned AA+. This rating signifies that Dangote Cement’s credit profile and liquidity is very strong, with low risk of default.
The rating accorded to Dangote Cement is an investment grade rating, signifying that it is an attractive investment vehicle. Speaking on the rating, Michel Puchercos, Chief Executive Officer, said: “Dangote Cement has shown great resilience in 2020 despite COVID-19 and achallenging environment. “The group continues to report strong cash generation while maintaining strong financial discipline. As Africa’s leading cement producer, we are committed to maximising shareholder value creation.”
It would be recalled that Dangote Cement in 2020 announced the successful issuance of 100 billion Series 1 Fixed Rate Senior Unsecured BondsdueApril2025under the Company’s 300 billion Bond Programme. The transaction was 1.5 times oversubscribed and represents Dangote Cement’s debut bond issuance in the debt capital markets. Book building with respect to the issuance commenced on April 3, 2020 following approval from the Securities and Exchange Commission and closed on 15 April 2020 at a coupon rate of 12.50 per cent.
Despite market headwinds due to COVID-19, the transaction was extremely well received and attracted significant demand from a wide range of high-quality investors including domestic pension funds, asset managers, insurance companies, banks and international fund managers. The total order book amounted to 155 billion.
The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets (as at time of issue), reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges.