Rating Release
Agusto & Co. hereby assigns an “A+” rating to BUA Cement Plc’s ₦115 billion Bond with stable outlook
The rating expires on 31-12-22
Agusto & Co. hereby assigns an “A+” rating to BUA Cement Plc’s (“BUA Cement”, “BCP”, “Issuer” or “the Company”) ₦115 billion 7.5% Seven-Year Senior Unsecured Fixed Rate Bond Due 2027 (“Series 1”, “the Issue” or “the Bond”) under the ₦200 Billion Debt Issuance Programme. The Issue rating mirrors the standalone rating of the Sponsor (BUA Cement Plc, rated “A+” by Agusto & Co, expiring 30 June 2022) as the repayment of the Series 1 Bond obligations (semi-annual coupon payment and principal redemption after a three-year moratorium) are fully backed by the Company’s operating cash flow. In the nine months ended 30 September 2021, BUA Cement Plc’s financial condition was characterised by good and sustainable operating cash flow, slightly improved profitability on account of revenue growth and overall reduction in costs, acceptable leverage position, satisfactory working capital and a qualified and experienced management team. Agusto & Co. has also considered the Issuer’s strong market position and brandacceptance in the Nigerian Cement Industry, the sustained expansion of its production plant capacities as well as the continued adoption of innovative energy solutions. However, the frail macroeconomic environment, high inflation rate and persistent Naira devaluation continue to impact negatively on the overall financial performance of cement manufacturers including BCP.
December 2020, BUA Cement Plc issued its maiden ₦115 billion 7.5% SevenYear Senior Unsecured Fixed Rate Bond Due 2027 under the ₦200 Billion Debt Issuance Programme. The Series 1 Bond is a senior, direct, unsecured debt and ranks pari passu with other senior debts of the Issuer. The proceeds of the Bond were utilised for the repayment of the existing shareholder loans obtained for the construction of its newly commissioned 3 million metric tonnes Kalambiana
Cement Plant Line III and to meet working capital requirements.
The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.