- Dangote Cement Raises N50b Via Commercial Paper
Africa’s largest cement manufacturer, Dangote Cement Plc, issued N50 billion commercial papers to finance short-term obligations.
The new CPs program represents eighth to the tenth series of Dangote Cement’s N150 billion commercial papers.
Break Down of the Series
Eight Series
The company offered 90-day commercial paper with an effective yield of 12.5254 per cent and a 10.51 percent discount rate.
Ninth Series
Issued commercial paper has 180-day tenor with an effective yield of 12.5254 percent discounted at 13.35 percent.
Tenth Series
These series offer CP of 270 days tenor with an effective and discount yield of 12.6862 percent and 14.00 percent, respectively. It is expected to mature on the 10th of March 2020.
While the 90-day and 180-day CPs are expected to mature on September 12, 2019 and December 11, 2019, respectively.
Commercial papers are unsecured short-term debt instrument issued by large corporations to finance short-term liabilities. Tenor range from 90 days to 270 days, rarely more than 270.
Because commercial papers are not backed by any form of collateral, they are unsecured debt. Therefore, only companies with high-quality debt rating will find buyers without offering a substantial discount for the debt issue.
Moody’s agency rated Dangote Cement Aaa and GCR gives the company AA+. Dangote Cement recently announced it has invested $3 billion its Pan-African operations.
