Geregu Power closes N40.1bn corporate bond issuance, Nigeria’s largest by a GenCo

By Habeeb Adamu.

Geregu Power Plc, a power company primarily engaged in the generation and sale of electric power in Nigeria, has announced its successful issuance of a N40.085 billion Senior Unsecured Bonds under its N100 billion multi-instrument issuance programme.

The transaction, which represents Geregu’s debut bond issuance in the debt market, is the largest corporate bond issuance by a power generation company in Nigeria’s capital markets.

The issuance commenced on July 1, 2022 following relevant approval of the Securities and Exchange Commission (SEC) and closed on July 14, 2022 with a bond yield of 14.50 percent.

United Capital Plc acted as Lead Issuing House to the debut offering, while CardinalStone Partners Limited, Comercio Partners Capital Limited, Cordros Capital Limited, Coronation Merchant Bank Limited, FBNQuest Merchant Bank Limited, iWorld Financial Services Limited, Kairos Capital Limited, Lighthouse Capital Limited, Renaissance Securities (Nigeria) Limited, UCML Capital Limited, and Vetiva Capital Management Limited were Joint Issuing Houses.

Geregu Power said the bond was over-subscribed and high-quality investors, including pension fund administrators, commercial banks, asset managers, insurance companies and other corporates, demonstrated huge appetite in spite of the rising interest rate environment due to increased borrowing activities and persistent inflationary pressures.

The company said it is a reflection of its strong credit quality as well as the resilience of the Nigerian debt markets, despite current domestic challenges. Geregu Power has been assigned a long-term national scale rating of (A) by GCR Rating.

Akin Akinfemiwa, CEO of Geregu Power, noted that the capital raising would in no small measure support the company’s capital investments.

“The resounding success of our debut bond offer demonstrates implicit confidence in our business by the investment community in our quest to increase capacity and contribute our own quota to the Nigerian Electricity Supply Industry (NESI),” Akinfemiwa said.

“It would help us in the attainment of our long-term corporate goals; market leadership, innovation, and commitment to the highest standards of environmental, social, and corporate governance,” he said.