Julius Berger completes  N30 billion commercial paper issuance

By Cynthia Ezekwe

Julius Berger Nigeria PLC, a leading construction company in Nigeria, has announced the successful completion of its ₦30 billion Series 1 and 2 Commercial Paper (CP)  issuance, which is the Company’s debut issuance in Nigeria’s fixed income market.

 The company, which is rated ‘A-’ by Agusto & Co and ‘A’ by DataPro, disclosed this in a statement signed by Cecilia E. Madueke, its company secretary, and published on the Nigerian Exchange (NGX) platform.

According to the statement, the CP Issuance was oversubscribed, demonstrating strong investor confidence in the management and vision of the Company.

The statement added that the CP 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 also disclosed  that the  CP Issuance comprised two tenors – a 182-day Series 1 issuance which priced at a 14.00 per cent yield and a 267-day Series 2 issuance which was priced at a 15.00 per cent  yield.

Julius Berger further noted that the  proceeds of the CP Issuance will be used for the purpose of supporting the company’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.

According to the disclosure on NGX website, Stanbic IBTC Capital Limited acted as lead arranger/Issuing and Placing Agent (IPA), while FCMB Capital Markets Limited  acted as joint arranger/IPA.

Commenting on the significance and success of the CP Issuance,  Lars Richter, the Managing Director (MD) of Julius Berger Plc,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 doubt that the success of this issuance provides an avenue to optimise 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,” the MD added.

Also speaking 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.

Akere also noted that the CP Issuance allowed Julius Berger diversify its funding sources and reduce its overall funding costs, while expressing his delight to the Board and management of Julius Berger for giving Stanbic IBTC Capital a free hand to guide the process to a successful completion.

On his part, Ikechukwu Omeruah, the head, debt solutions of  FCMB Capital Markets Limited, stated: “FCMB Capital Markets Limited is pleased to have acted as co-arranger and dealer to the successful issuance of Julius Berger Nigeria Plc’s N30 billion Series 1&2 Commercial Paper. The Julius Berger CP issuance was well received by the domestic investor community; reflected by a substantially oversubscribed order book made up of a very diverse universe of investors.

“This result is a testament to the quality and equity of the Julius Berger brand. FCMB Capital Markets is appreciative of the opportunity to partner with Julius Berger Nigeria Plc in successfully establishing the proof of concept of another channel of funding for the Company’s working capital requirements,’’ Ikechukwu added.