Presco Plc, Nigeria’s largest palm oil producer, has announced plans to raise ₦100 billion in Series 1 of its ₦150 billion bond program, setting a new benchmark in the country’s corporate bond market. This offering, featuring a yield range of 23.25% to 23.75% over a seven-year term, underscores Presco’s robust creditworthiness, with an A rating from GCR and an AA rating from Agusto & Co.
This marks Presco’s second venture into the capital market following its successful ₦34.5 billion issuance in 2022 under a ₦50 billion program. That seven-year bond, issued at a 12.85% coupon rate, highlighted the company’s ability to attract substantial investments.
Corporate Bond Market Trends
Presco’s bold move comes at a time when Nigerian corporate bond issuances have been impacted by high-interest monetary rates. In 2024, the total corporate bond issuance fell to ₦69.37 billion from ₦126 billion in 2023, as many companies leaned toward shorter-tenured commercial papers to offer competitive yields without long-term commitments.
Despite this trend, Presco’s proposed ₦100 billion issuance reinforces the growing confidence in Nigeria’s capital markets. Its scale rivals some of the country’s largest corporate bond offerings, including the ₦112.42 billion raised by the Dangote Group in December 2022 and the ₦115 billion raised by MTN Nigeria in September 2022.
Presco Plc’s strong financial foundations in 2024 have solidified its position as a leading force in Nigeria’s business landscape. The company is projected to achieve triple-digit net profit growth in 2025, boasting one of the highest returns on equity nationwide. This solid performance enhances its appeal to both institutional and individual investors, making its bond issuance an attractive opportunity.
This move by Presco is expected to reinvigorate confidence in Nigeria’s capital markets, potentially encouraging other companies to explore long-term financing options. With its successful track record and positive financial outlook, Presco is setting a precedent for future corporate bond offerings in the country.
The planned bond issuance not only demonstrates Presco’s ambition but also signifies a renewed trust in Nigeria’s capital markets as a viable platform for raising substantial capital, even in a challenging economic climate.
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