Dangote Cement Opens N100bn Commercial Paper Offer at Yields of 17.5% and 19%

Dangote Cement Plc has opened subscription for its N100 billion Commercial Paper (CP) offer, the first tranche under its N500 billion Commercial Paper Issuance Programme. The offer, which opened on Monday, November 17, 2025, will close on Wednesday, November 19, 2025, and is issued across two series for professional and institutional investors.

According to the pricing documents, the Series 1 CP, with a 181-day maturity, is offered at a 16.10% discount rate, implying a yield of 17.50%, while the Series 2 CP, with a 265-day tenor, is priced at a 16.70% discount rate, translating to a 19.00% yield. The minimum subscription is N50 million, with additional subscriptions in multiples of N1,000. Dangote Cement stated that proceeds from the issuance will be used to meet working capital needs.

The company continues to demonstrate strong financial performance, maintaining its position as one of Nigeria’s most profitable corporates. Its revenue has grown from N1.03 trillion in 2020 to N3.58 trillion in 2024, representing a 37% annual growth rate, while profit after tax increased from N276 billion to N503.25 billion over the same period. For the nine months ended September 2025, the company reported N3.15 trillion in revenue, up 22% from last year, alongside N1.04 trillion profit before tax—an increase of 150%. Profit after tax more than doubled to N743.3 billion, operating cash flow rose to N1.29 trillion from N532 billion, and borrowings fell by 47% to N1.32 trillion from N2.5 trillion in December 2024. Its interest coverage ratio also improved to 4.4 from 3.3, indicating stronger debt-servicing capacity. However, the company recorded a decline in production volume in 9M 2025, suggesting that price increases were a major driver of performance.

Rating agencies have maintained a broadly positive view of the company. DataPro reaffirmed Dangote Cement’s AA long-term and A1 short-term ratings, citing its strong brand, experienced management, and consistent earnings. GCR Ratings, however, downgraded the company to A+(NG) from AA+(NG) due to the group-cap effect linked to Dangote Industries Limited, though it acknowledged the company’s strong cash flows and expects its leverage to improve by the end of 2025. Agencies also highlighted risks including low asset utilisation, foreign-exchange exposure, and challenges in some Pan-African markets.

Dangote Cement remains Sub-Saharan Africa’s largest cement producer, with 55 million tonnes per annum in installed capacity across 11 countries, and operates a fully integrated “quarry-to-customer” business that has helped eliminate Nigeria’s dependence on imported cement and enabled exports to neighbouring markets.

Despite industry pressures, analysts say the company’s improving leverage, strong cash flows, N3.15 trillion revenue base, and competitive yields of 17.5% to 19% make the CP offer an attractive option for investors seeking short-term, high-yield investments, though risks such as production softness, forex exposure, and regional instability remain relevant.