Transcorp Hotels Issues N9.758bn Bond

Transcorp Hotels Plc – the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp Plc) has announced a successful naira bond market transaction, issuing a total of N9.758 billion.
It is the second tranche in its N30 billion medium term bond programme registered with the Securities and Exchange Commission (SEC).


Speaking during the completion board meeting in Abuja on Friday, managing director/chief executive officer of Transcorp Hotels, Valentine Ozigbo, said the proceeds of the issue will be used to finance the upgrade of the company’s flagship hotel, Transcorp Hilton Abuja, and other buildings, including construction of a 5,000 seater multipurpose banquet centre.

Ozigbo said that the transaction, which is a 5-year fixed-rate bond, due in 2020, is in addition to the to a prior issue of N10 billion, being Series 1 in a Senior 7-Year 16.00 per cent fixed rate (Unsecured) Bonds due 2022 issued in October 2015.
With this, the total amount the company has successfully raised to date is N19.758 billion.
The Series 2 Bond will carry a gross coupon of 15.50 per cent per annum for a period of five years. The redemption on maturity, expected to be 2020, will be at 100 per cent of the nominal amount of the Bonds.

The Bonds are available in denominations of N1,000, and will be listed on the main market of the Nigerian Stock Exchange and also the FMDQ OTC platform for enhanced tradability. FSDH Plc is the lead issuing house, while United Capital Plc and Stanbic IBTC Capital Limited are joint issuing houses.
“We are embarking on a full renovation of the historic Transcorp Hilton Abuja and its 670 rooms and on-site facilities. This is the first major renovation of the historic Transcorp Hilton Abuja for the first time in its 30-year history, save for a minor one 10 years ago. This bond issue will finance the upgrade, new hotels and the development of a 5,000-seater multi-purpose Banquet centre,” said Ozigbo.

“The availability of funds enables us to enhance our financial flexibility by diversifying our sources of funding while significantly extending the maturity of the Group’s funding and ensuring optimal capital mix.”
We are delighted by the investor reception for Transcorp Hotels in the bond markets” said Emmanuel N. Nnorom, President and Group CEO of Transcorp Plc.

The company held a signing ceremony in Abuja on Friday December 4, 2015 to mark the issue of Series 2. The company has secured Securities and Exchange Commission (SEC) approval as well as a certificate of “PenCom Compliance” to enable participation by the Pension Fund Administrator (PFA) community, as one of the target investors in the bond.