Dangote Sugar Refinery plans to borrow N50 billion through Series 4 and 5 CPs. This will total N100 billion raised. Series 4 offers 181-day CPs at a 20.65% rate. Series 5 has 265-day CPs at 21.17%. The offer opened on May 16 and closes on May 22, 2024. Settlement will occur on May 23. Since February 9, the company raised N99.01 billion from Series 1, 2, and 3. Series 1 issued N39.39 billion at 17.08% for 266 days. Series 2 issued N6.15 billion at 19.81% for 184 days. Series 3 issued N53.47 billion at 21.30% for 254 days.
Nigeria’s interest rate hike to 26.25% makes real sector loans costly. Dangote Sugar offers attractive CP rates of 21.3%, 21.17%, and 20.65%. These rates rival returns on FGN Treasury bills, attracting investors. High financing costs challenge the real sector. Stanbic IBTC charges up to 50% for manufacturing loans. FCMB’s rates range from 23% to 40%. Manufacturing players face tough conditions like energy cost hikes and FX exposure losses. Borrowing costs up to 50% pose significant challenges. Businesses seek fixed-income markets for financing due to high bank loan rates. To compete, they must offer discount rates around 20%.
Sources : Nairametrics
