Dangote Industries Limited has received the top national-scale credit ratings from GCR Ratings, marking a major improvement in the Nigerian conglomerate’s credit profile as its refinery reaches full production and cash generation strengthens.
Key takeaways
- The company’s long-term issuer rating rose to AAA(NG), while its short-term rating moved to A1+(NG), both with a Stable Outlook.
- GCR also raised the ratings on three bond instruments issued by Dangote Industries Funding Plc to AAA(NG).
- Higher refinery cash flows, earnings from other businesses, debt restructuring and improved liquidity supported the decision.
- The upgrade is expected to widen Dangote’s financing options and improve liquidity management.
- The group said it remains focused on governance and transparency ahead of the Dangote Petroleum Refinery & Petrochemicals IPO.
Refinery cash flows support ratings rise
GCR Ratings, an affiliate of Moody’s Ratings, lifted Dangote Industries’ long-term issuer assessment by four notches from A+(NG) to AAA(NG). Its short-term rating also advanced from A1(NG) to A1+(NG). Both ratings carry a Stable Outlook, Dangote Group said in a Friday statement.
The agency also upgraded the national-scale long-term issue ratings for Dangote Industries Funding Plc’s Series 1 Tranche A and Tranche B Bonds, along with its Series 2 Bond. Each instrument moved to AAA(NG) from A+(NG).
AAA(NG) and A1+(NG) are the highest long-term and short-term grades available under GCR’s national rating framework.
GCR attributed the stronger credit profile to the successful expansion of the Dangote Petroleum Refinery to full capacity, resilient profits from the group’s other operations, and progress in repaying and refinancing debt. It also cited better leverage and liquidity, together with advances in risk controls, treasury management and financial reporting.
The ratings agency said refinery-generated cash, combined with continued earnings across the wider group, had improved Dangote’s capital position and its outlook for leverage. Stronger operating results had allowed the company to retire and refinance borrowings on more favourable terms, thereby improving its leverage indicators.
Funding capacity and planned IPO
Dangote Industries said the decision reflected stronger financial results, higher cash generation and a healthier liquidity position.
Murat Erden, the group’s chief financial officer, said the assessment provided independent confirmation of the financial changes under way across Dangote and of management’s measured approach to expansion. He said the company welcomed the result and viewed it as recognition of the discipline guiding its next growth phase.
Erden added that the higher ratings should help Dangote expand its businesses, provide investors and creditors with greater transparency, diversify its funding channels and manage liquidity more efficiently. He said the development also supported the group’s wider objective of contributing to prosperity across Africa.
As work advances on the initial public offering of Dangote Petroleum Refinery & Petrochemicals, Erden said the group would maintain institutional-grade governance, open financial reporting, careful capital allocation and a focus on creating durable value for shareholders.
