Rating Release

Agusto & Co. hereby affirms the “A-” rating assigned to Flour Mills of Nigeria Plc’s ₦10 Billion Bond with a stable outlook

The rating expires on 30-10-23

Agusto & Co. hereby affirms the “A-” rating assigned to Flour Mills of Nigeria Plc’s (“Flour Mills”, “FMN”, “the Issuer”, or “the Company”) ₦10 Billion 5-Year 16% Fixed Rate Senior Unsecured Bond Due 2023 (“Series 2 Bond”, “the Bond” or “the Issue”) under the ₦70 Billion Bond Issuance Programme. The rating reflects our opinion on the Issuer’s strong capacity to pay obligations demonstrated by its healthy cash flow position and satisfactory profitability level even in the face of worsening macroeconomic headwinds.

On 1 November 2018, Flour Mills of Nigeria Plc raised ₦20.11 Billion in Bonds split into two parts – a ₦10.11 billion 3-Year 15.5% Fixed Rate Senior Unsecured Bond Due 2021 (“Series 1 Bond”) and a ₦10 billion 5-Year 16% Fixed Rate Senior Unsecured Bond Due 2023 (“Series 2 Bond”). The net proceeds from the two Bonds were used to refinance FMN’s existing bank loans. The Series 1 Bond was redeemed in a lump sum on 30 October 2021, while the maturity date for the Series 2 Bond is 30 October 2023. The Series 2 Bond, which was issued by way of an offer for subscription to qualified investors, attracts a 16% fixed coupon rate payable semi-annually. The half-yearly redemption of the principal amount started on 30 April 2020 following the expiration of a one-year moratorium. The Series 2 Bond coupon and principal obligations are being met from the operating cash flow of the Issuer.

The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.