Julius Berger Nigeria Plc has announced the completion of its N30 billion Series 1 and 2 Commercial Paper (CP) issuance. The company announced this in a corporate disclosure it sent to the Nigerian Exchange Limited, as seen by Nairametrics. Over-subscribed commercial paper: According to the statement which was signed by Company Secretary Mrs Cecilia Madueke, the commercial paper issuance was over-subscribed, demonstrating strong investor confidence in the company. The statement added that the issuance attracted significant demand from a wide range of investors including pension fund administrators, asset managers, insurance companies, banks and high-net-worth individuals. The company noted that the CP Issuance comprised two tenors – a 182-day Series 1 issuance which was priced at a 14.00% yield and a 267-day Series 2 issuance which was priced at a 15.00% yield.
Plan for the CP proceeds: Julius Berger further stated that the proceeds of the CP issuance will be used to support Julius Berger’s short-term working capital and funding requirements, thus further strengthening its competitive advantage in the construction sector in Nigeria and its financial flexibility as the Company implements its strategic initiative to diversify into economically significant sectors starting with the launch of its cashew processing business. Stanbic IBTC Capital Limited acted as Lead Arranger/Issuing and Placing Agent while FCMB Capital Markets Limited acted as Joint Arranger/IPA. Commenting on the significance and success of the CP Issuance, Dr Lars Richter, the Managing Director, said:
“Julius Berger is delighted to have successfully completed its debut CP Issuance in the Nigerian fixed-income market. “This is truly a testament to the Company’s strength, the sustainability of its brand and the level of confidence Nigeria places in the Company’s services. It is without a doubt that the success of this issuance provides an avenue to optimize our funding cost while continuing to drive our strategic initiatives as an organisation.
“We are pleased by the success of the CP Issuance and grateful to the investor community for supporting the transaction.” Also commenting on the successful debut issuance, Funso Akere, Chief Executive of Stanbic IBTC Capital, said: “Stanbic IBTC Capital is delighted to have acted as Lead Arranger/IPA to Julius Berger’s debut CP Issuance. As the leading investment banking franchise in Nigeria, we pride ourselves in bringing new issuers to the fixed-income and debt capital markets. Julius Berger has a rich history and pedigree in Nigeria, having commenced operations in 1965, and the CP Issuance availed the Nigerian investor community an opportunity to gain exposure to a top-quality corporate in the construction and infrastructure sector, thus diversifying their investment portfolios. The CP Issuance also allowed Julius Berger to diversify its funding sources and reduce its overall funding costs. We thank the Board and management of Julius Berger for giving Stanbic IBTC Capital a free hand to guide the process to successful completion.”
