THUR. 16 FEB, 2023-theGBJournal| Julius Berger Nigeria PLC, a leading construction company in Nigeria, Wednesday announced the successful completion of its N30 billion Series 1 and 2 Commercial Paper issuance (a short-term debt instrument issued by corporations), the Company’s debut issuance in Nigeria’s fixed income market.
‘’The CP Issuance was 2.3x subscribed demonstrating strong investor confidence in the management and vision of the Company,’’ Julius Berger management said in a statement.
The company said 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 CP Issuance comprised two tenors – a 182-day Series 1 issuance which priced at a 14.00% yield and a 267-day Series 2 issuance which was priced at a 15.00% yield.
According to the Company, ‘’the proceeds of the CP Issuance will be used for the purpose of supporting 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 (IPA) 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.
Richter added; ‘’it is without 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 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.’’
Akere noted that 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 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 a successful completion,” he said.
Also speaking on the issuance, FCMB Capital Markets Limited, through the Head, Debt Solutions, Mr. Ikechukwu Omeruah, said expressed FCMB Capital Markets Limited pleasure 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 (CP).
He said 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, and 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.”
The Commercial Paper will be quoted on the FMDQ Securities Exchange.
Julius Berger Nigeria Plc Julius Berger offers holistic services covering the planning, design, engineering, construction, operation and maintenance of buildings, infrastructure and industry projects in Nigeria.
Since the execution of its pioneer project in 1965 by Julius Berger Tiefbau AG; a related entity, Julius Berger has played a pivotal role in the development of Nigeria’s industrial and civil infrastructure.
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