Presco Plc Makes History with Largest Corporate Bond Issuance in Nigeria

In a groundbreaking move, Presco Plc, Nigeria’s largest palm oil producer, has announced a historic N100 billion Series 1 bond issuance, the largest corporate bond offering in the industry. This landmark transaction is part of the company’s N150 billion bond programme, marking a significant milestone in Presco’s growth strategy.

The Bond Issuance

The 7-year bond will offer a competitive yield range of 23.25% to 23.75%, reflecting Presco’s strong credit profile, which boasts an Aa rating from Agusto & Co. and an A- rating from GCR. This issuance marks the company’s second foray into the capital market, following its successful N34.5 billion raise in 2022.

The bond issuance is expected to attract significant interest from investors, given Presco’s strong market position, solid financial performance, and promising growth prospects. The company’s commitment to transparency, governance, and sustainability is also expected to resonate with socially responsible investors.

Strategic Objectives

The funds raised from the bond issuance will be used to acquire Ghana Oil Palm Development Company (GOPDC) Limited and expand Presco’s operations to deliver more value to shareholders. This strategic move is expected to have a positive impact on corporate sentiment, encouraging other companies to explore the capital markets.

The acquisition of GOPDC Limited will not only expand Presco’s footprint in the West African region but also increase its production capacity, enabling the company to meet growing demand for palm oil and other agricultural products.

Market Impact

Presco’s record-breaking bond issuance is expected to have a positive impact on the Nigerian capital market, demonstrating the potential for large-scale corporate bond issuances. This transaction is also expected to set a precedent for other companies, encouraging them to explore the capital markets to raise funds for strategic expansion and growth initiatives.

The success of this bond issuance will also reinforce investor confidence in the Nigerian economy, highlighting the potential for corporate Nigeria to raise large-scale capital from the domestic market.

Conclusion

Presco Plc’s historic N100 billion bond issuance marks a significant milestone in the company’s growth strategy, demonstrating its commitment to transparency, governance, and sustainability. As the company continues to expand its operations and deliver value to shareholders, this transaction is expected to have a positive impact on the Nigerian capital market and the broader economy.