Stanbic IBTC Capital, Lead Issuing House for Axxela Funding 1 PLC’s ₦16.4b 10-Year Series 1 Fixed Rate Bond
Axxela Funding 1 PLC’s (“the Issuer”), a funding vehicle incorporated by Axxela Limited (“Axxela” or the “Company”), sub-Saharan Africa’s leading gas and power portfolio company, has achieved a significant milestone with the successful completion of its ₦16.4 billion Series 1 Fixed Rate Bonds due 2034 (the “Bond Issuance” or the “Transaction”).
The Transaction was issued under its newly established ₦50 billion Multi-Instrument Issuance Programme (the "Programme"). Acting as the Lead Issuing House for the Bond Issue, Stanbic IBTC Capital, the investment banking subsidiary of Stanbic IBTC Holdings, alongside seven Joint Issuing Houses, played a pivotal role in the transaction with Stanbic IBTC Bank and Ecobank PLC serving as the transaction banks.
The bond issuance will enable Axxela Limited fund its long-term capital expenditure, manage its weighted average cost of capital via a fixed rate instrument and diversify its funding sources whilst meeting the Company's strategic objectives. It also presents an attractive investment opportunity for the investor community who seek viable investment options and encourages other corporates to explore the domestic fixed income markets to meet their funding requirements.
Despite launching the Transaction amidst challenging economic conditions, with upward pressure on interest rates and tight market liquidity, the bond issuance was well-received and achieved a 109 per cent subscription from a wide range of investors including Pension Fund Administrators (PFAs), Asset Managers and High Networth Individuals (HNIs). This reflects investors' confidence in Axxela Limited, with the company initially targeting ₦15 billion but ultimately issuing ₦16.4 billion due to strong demand.
Commenting on the bond issuance, Bolaji Osunsanya, Chief Executive Officer, Axxela Limited said, "We extend our heartfelt gratitude to the investor community for their support and continued confidence in Axxela’s long-term vision and strategy. The success of the transaction underscores the trust placed in our management team and our commitment to driving sustainable growth in Nigeria’s energy sector. We are very proud of this transaction and the trust of investors in our business model and growth prospects.”
Timothy Ononiwu, Chief Financial Officer, Axxela Limited said “We are grateful for the success of the Transaction which speaks to the investors’ recognition of Axxela’s operating and financial performance over the years and the significant growth prospects across our value chain. We will continue to explore opportunities to diversify our funding sources and optimise our funding structure towards achieving our financial objectives. We are also thankful for the support of our advisers who guided us through this process and the investors who continue to believe in our story.”
Dele Sotubo, Chief Executive of Stanbic IBTC Capital, highlighted the significance of the transaction in demonstrating the depth, liquidity, and resilience of the Nigerian debt capital market. He added that, "Stanbic IBTC Capital is delighted to have played a key role as Lead Issuing House and adviser to Axxela Limited in facilitating this Transaction, At Stanbic IBTC, we are committed to the development of Nigeria's energy sector and the broader economy. This Transaction aligns with our sustainability agenda and we will continue to support projects that promote the environmental, social and economic development of Nigeria. We thank Axxela for trusting Stanbic IBTC Capital and the other Joint Issuing Houses in seeing the issuance to a successful completion."