Capital Market

FMDQ admits BUA Cement N115bn bond, largest on debt capital market

Eyewitness reporter

FMDQ Securities Exchange Ltd has announced the admission for listing the BUA Cement Plc N115 billion series 1 fixed rate senior unsecured bond under its N200 billion bond issuance programme.

The issuance, the first by BUA Cement, became the largest corporate bond issued in the Nigerian Debt Capital Market (DCM).

The bond was approved by the board Listings and Markets Committee of the Exchange.

The proceeds from the issuance would be used to refinance existing debt obligations of the issuer, finance the issuer’s working capital as well as fund its debt service reserve account.

BUA Cement, a publicly listed company, is the second-largest cement producer in Nigeria and the largest cement producer in the North-Western region of the country.

Speaking on the significant and successful issuance of the bond, the Chairman, BUA Cement, Abdul Samad Rabiu, was quoted by the statement as saying the bond was the largest corporate bond issue in the history of Nigeria’s DCM.

“In 2020, we made a strategic decision as a proudly Nigerian company to list the shares of BUA Cement.

“This was in line with our core strategy to continue seeking out viable investment and growth opportunities within Nigeria.

“This bond issue – a first by BUA Cement, demonstrates our confidence in the Nigerian DCM as well as continued investor confidence in BUA Cement’s business model, our management team, and long-term strategy, all supported by strong credit ratings.

“We remain committed to unlocking opportunities within the industry for Nigeria,” Rabiu said.

Also speaking, the company’s Chief Executive Officer, Mr Yusuf Binji, said “the success of the bond issue underscores the strength of BUA Cement’s brand”.

The transaction, being the largest corporate bond issuance in the history of Nigeria’s DCM, reiterates the strength and acceptance of BUA Cement’s brand and the trust placed by stakeholders in the company’s strong cash generation capacity, credit profile and strategy driven by a well-experienced management team.

“Diversifying and extending the duration of our funding sources with the inclusion of this Bond, at a competitive rate, will further enable us to achieve our strategic objectives and vision.

“We also have confidence in FMDQ Exchange, hence our decision to list the Bond on the Exchange.

“BUA Cement is profoundly grateful to the entire transaction parties, the bondholders and the regulators, who have made this become a reality today,” Binji said.

FMDQ Group is Africa’s first vertically integrated financial market infrastructure group which provides a one-stop platform for seamless and cost-efficient execution, risk management, clearing, settlement, depository and data and information services for Nigerian companies.

Capital Market

SEC adopts sustainable finance guidelines for CMOs

Eyewitness reporter

The Securities and Exchange Commission (SEC) has adopted the Nigerian Sustainable Finance Principles (NSFP) which was developed by the Financial Services Regulation Coordinating Committee (FSRCC) for Capital Market Operators (CMOs).

A statement by the Commission on Sunday said that the objectives of the guidelines were to stimulate a resilient, competitive and sustainable market that would promote economic development.

The commission said the guidelines would also improve corporate governance practices to ensure that the participants in the market operated in a transparent and sustainable manner.

According to SEC, it will also help in accessing affordable capital market products by the economically less privileged.

The Commission said the guidelines and approach were principle-based and therefore do not prescribe specific implementation requirements.

It however noted that the principles be applied by each regulated entity in a manner that would fit their mandates, core values, and enterprise risk management framework.

”The adoption of financial sustainability principles and its reporting are vital steps towards achieving a sustainable economy.

”Consequently, regulated entities must report regularly on the extent to which they apply these principles,” the Commission explained.

SEC however listed its regulated entities to include CMOs, Trade Groups, Self-Regulated Organisations (SROs) and Capital Trade Points.

Capital Market

SEC releases new rules on warehousing

Oladimeji Ige

The Securities and Exchange Commission (SEC) has released new rules covering warehousing and collateral management to ensure vibrant commodities trading.

A statement by the commission issued to newsmen on Sunday in Abuja said that the move would translate into foreign exchange earnings for the country.

According to the SEC, every warehouse that stores commodities to be traded on a registered Exchange, shall apply to be registered by the commission.

”A warehouse applying for registration going by the rule, shall submit proof of ownership or registered-lease deed or rent agreement.

”They will also come along with a disclaimer from the owner of the warehouse/property, providing waiver of ownership regarding commodities stored in such warehouse.

”In the case of leased or rented warehouse; present evidence of construction in compliance with the National Building Code and have facilities appropriate for storage of commodities.

”The rules also said that for a Collateral Management Company (CMC) to be registered by the commission, an application would be filed to SEC, accompanied by the relevant documents,” it said.

The commission listed some of the document required to include two sets of completed SEC forms to be filed by the sponsored individuals and a copy of the Certificate of Incorporation, certified by the Corporate Affairs Commission, among others.

The rule according to the statement, further required Fidelity Bond representing 20 per cent of paid-up capital, sworn undertaken to keep proper records and render returns and evidence of minimum paid-up capital of N50 million.

”The two principal officers of the CMC who shall be registered as sponsored officers, must have a minimum of a university degree or its equivalent with not less than 10 years relevant post-qualification experience,” SEC stated.