FMN lists N20.11bn bond on NSE, FMDQ
Flour Mills of Nigeria Plc has listed a N20.11bn bond on the Nigerian Stock Exchange and the FMDQ OTC Plc.
The Group Managing Director, Flour Mills, Mr Paul Gbededo, while speaking at the listing programme in Lagos on Friday, said the N10.11bn Series 1 and N10bn Series 2 senior unsecured fixed rate bonds were issued under its N70bn bond issuance programme.
He said the transaction was strongly supported by the institutional investor community and oversubscribed by 190 per cent within the price guidance.
According to Gbededo, the Series 1 bonds are priced at 15.50 per cent for a tenor of three years with bullet repayment at maturity, while the Series 2 bonds are priced at 16 per cent for a tenor of five years with a one-year moratorium on principal payment and an amortising profile.
He noted that the proceeds of both issuances were used entirely to refinance existing debt obligations of the company and streamline its maturity profile.
He said, “Notwithstanding declining market conditions with a five-year benchmark yield rising from a record low of 10.45 per cent at the start of the year to 15.45 per cent high in September, the success of the transaction was largely due to the momentum created during the well-attended investor roadshow meetings in Lagos and Abuja.
“The company was able to leverage its strong credit profile and investment grade ratings assigned by two leading, well-established rating agencies. The transaction will help the company achieve its strategic objective of sustaining its market leadership position.”
The Chairman, Board of Directors, Flour Mills, Mr John Coumantaros, said the company was delighted to return to the capital market with such a successful outing, especially with the level of interest shown by investors.
He said the response from the market vindicated the company’s decision to take the additional step in diversifying its financing options.
“We are very pleased to have worked with our advisors ― Stanbic IBTC Capital Limited as the lead issuing house, along with ARM Securities Limited, FBNQuest Merchant Bank Limited, FCMB Capital Markets Limited, United Capital Plc and Zenith Capital Limited as Joint-Issuing Houses ― on a highly successful transaction,” Coumantaros added.