Viathan Group, a provider of captive and embedded power solutions, issued Nigeria’s first corporate infrastructure bonds to refinance existing bank loans and fund its expansion plan.
Following the signing meeting, which took place on 14th December 2017, the power firm successfully issued NGN10 billion Series 1 Bonds, the first issuance under its NGN50 billion Bond Issuance Programme registered to support the company’s plan to increase its power generation capacity from the current 50MW to 200MW, over a 5-year period.
With InfraCredit’s guarantee, Viathan Group, through Viathan Funding Plc – a special purpose vehicle established to raise debt capital, successfully accessed the debt capital markets for the first time by issuing a NGN 10.0bn 16.0% Series 1 Senior Guaranteed Fixed Rate Bond Due 2027 (the “Viathan Bonds”) backed by the irrevocable and unconditional guarantee of InfraCredit and accorded a ‘AAA’ long term national scale rating by GCR and Agusto & Co with approval from the Securities and Exchange Commission (SEC).
InfraCredit is a ‘AAA’ rated infrastructure credit enhancement facility established as a commercial entity by the Nigeria Sovereign Investment Authority and GuarantCo to provide guarantees to enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure assets in Nigeria.
InfraCredit acted as a catalyst to attract the investment interest from pension funds, insurance firms and other long-term investors, thereby deepening the Nigerian debt capital markets.
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InfraCredit operates on a commercial basis and benefits from private sector governance. GuarantCo is part-of the Private Infrastructure Development Group (PIDG), the PIDG also supported the establishment of InfraCredit through its Technical Assistance Fund.
The Viathan Bonds was subscribed by sixteen (16) institutional investors comprising pension funds organizations and insurance companies.
The NGN10 billion bonds recorded a 105% subscription and was priced at an 82bps premium to the 10-year sovereign benchmark bond (NIGB 16.288 03/17/2027 Govt) using the 60-day yield average adapted for the bookbuild exercise.
Necessary process to list the bonds on FMDQ OTC Securities Exchange is being finalised.
Viathan Engineering Limited is a leading indigenous provider of integrated captive and embedded power solutions to government and commercial clients with proven track record in the Nigerian (off-grid) power solutions sector using natural gas as fuel.
Speaking on the development, the CEO of Viathan Engineering Limited, Mr. Ladi Sanni said, “the success of the bond issuance has significant implication for Viathan’s capacity expansion strategy; with 10-year funding at relatively lower borrowing cost, Viathan Group is better positioned to efficiently execute its capacity expansion plan in captive power generation and increase its diversification into gas processing, while significantly achieving its mid-term to long-term target with better returns to shareholders”.
The strategic alliances with InfraCredit, that birthed the successful bond issuance, and other initiatives such as the recent execution of an equipment supply agreement with UNATRAC UK, (Caterpillar’s main distributor for Europe/Africa), will reinforce Viathan’s commitment to execute its expansion plan and achieve medium to long term targets that would consolidate the company’s position as a preferred indigenous provider of integrated captive and embedded power solutions in Nigeria.
