Afrinvest Capital Limited has announced the opening of the book build for Axxela Funding 1 Plc’s Series 1 bonds is still ongoing. The offer opened on Tuesday 5 March 2024 and will close on Monday 11 March 2024.
The Series 1 bonds, with a tenor of 10 years and a total issue size of up to ₦15 billion, is a strategic move by Axxela to leverage domestic capital markets for funding its ambitious projects. The bonds, offered under a ₦50 billion Multi-Instrument Issuance Programme, aim to support Axxela’s ongoing initiatives, including the VI-Lekki Backbone projects, Ibafo LIA City Gate, OPL License, Sagamu Expansion Project, customer connects, and other capital expenditures.
One of the key highlights of the offering is the credit enhancement mechanism, which includes a minimum reserve account to cover six months’ obligations.
Axxela, a company backed by Helios Investment Partners LLP and Sojitz Corporation, has been at the forefront of revolutionizing Nigeria’s natural gas distribution network. With infrastructure spanning over 300 kilometers, Axxela caters to the energy needs of over 185 industrial and commercial customers. Its subsidiaries, including Gaslink Nigeria Limited and Gas Network Services Limited, have played a key part in expanding the company’s footprint across the region.
Axxela’s Series 1 bonds offer investors an opportunity to partner with a market leader in Nigeria’s energy sector while contributing to the country’s sustainable development goals.
The indicative terms of the proposed offer, with a book build price guidance of 18.00 – 19.00%, coupled with issuer and issue ratings of A- by both Agusto and GCR, further enhance the attractiveness of the bonds to potential investors.
Additionally, the fixed-rate, semi-annual coupon basis ensures predictable returns for investors over the bond’s tenure. Axxela’s impressive financial performance, as evidenced by its revenue growth from ₦82.6 billion in 2020 to ₦120.4 billion in 2022, coupled with a steady increase in net income and total assets, has shown its strong market position. The company’s total equity has also seen a commendable growth, reaching ₦29.9 billion in 2022, further solidifying its financial stability.
Moreover, Axxela’s strategic initiatives extend beyond traditional energy solutions, as the company is actively exploring opportunities in renewable energy programmes. The bonds’ redemption obligations, jointly guaranteed by the sponsor and co-obligors alongside the issuer, provide an additional layer of security for investors. Furthermore, the callable feature from the 5th year of issue offers flexibility in managing the bonds’ maturity profile.
Upon issuance, the bonds will be listed on the FMDQ Securities Exchange, providing liquidity and transparency to investors. This listing reflects Axxela’s commitment to best practices in corporate governance and transparency. Investors keen on participating in the offering can access detailed information through the provided offer documents, including the shelf prospectus, programme trust deed, series 1 pricing supplement, series 1 trust deed, and other relevant certificates and agreements.
