Moody's Investors Service ("Moody's") has downgraded Dangote Cement plc (DANGCEM) long term corporate family rating (CFR) to B2 from B1, the national scale long term corporate family rating to Aa3.ng from Aa2.ng and the probability of default rating (PDR) to B2-PD from B1-PD. At the same time, Moody's has affirmed the (P)B2 local currency rating and Aa3.ng national scale rating assigned to the NGN300 billion domestic medium-term note program (DMTN) and the B2 local currency and Aa3.ng NSR to the senior unsecured notes issued by DCP. Moody's has also changed the outlook to negative from ratings under review.

"The downgrade of the CFR to B2 is driven by the increase in dollar debt in DCP's capital structure which was not initially contemplated in the B1 rating. This exposes DCP to increased currency risks because most its cash flow are generated in naira and other African currencies and the fact that all the dollar debt has maturities of less than a year. This currency risk is captured under Moody's B2 foreign currency ceiling of Nigeria which is limiting the ability of DCP to be rated higher", say Dion Bate (Vice President - Senior Analyst), the lead analyst for Dangote Cement. "The downgrade however is not driven by concerns around the cement fundamentals in Africa or the business, which continues to perform strongly", adds Mr. Bate.

Today's rating action concludes the review for downgrade, which was initiated on 5 August 2021.