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Fixed Income

CSCS launches Regconnect, seeks improved capital market efficiency 

The Nigeria Central Securities Clearing System (CSCS) Plc has introduced Regconnect, an easy-to-use information exchange web application.

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CSCS launches Regconnect, seeks improved capital market efficiency 

The Nigeria Central Securities Clearing System (CSCS) Plc has introduced Regconnect, an easy-to-use information exchange web application to enhance the relationship between company registrars and clearinghouse and improve capital market efficiency.

According to The Nation, the Managing Director, CSCS Plc, Mr Haruna Jalo-Waziri disclosed that the new application was to strategically automate and improve operational efficiency in the Nigerian capital market. The application was developed having reviewed CSCS’ operations and methods of interaction with registrars.

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Regconnect, according to Mr Jalo-Waziri, will allow registrars process data, unlike the previous solution that only connects with CSCS through a data exchange application and doesn’t process data. The application will aid daily processes concerning the maintenance of registers, with immediate validation of all data being submitted to ensure the accuracy of records, in less time.

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However, Regconnect provides greater efficiency for the capital market; the application would automate interactions and improve CSCS’ connection with the registrars’ community.

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Usage of the Regconnect platform comes at no cost to all registrars. It is an advanced replacement for the data exchange platform currently in use. It allows seamless integration with Registrar’s live data by offering end-to-end and system-to-system data exchange between CSCS and registrars,” Jalo-Waziri said.

[READ MORE: NIS partners IOM, as Nigeria launches Migration Information and Data Analysis System]

Meanwhile, according to the Chief Executive Officer, First Registrars and Investor Services Limited and President, Institute of Capital Market Registrars (ICMR), Mr. Bayo Olugbemi, the introduction of Regconnect to the Nigerian capital market was a welcome development as the solution will reduce processing time, enable swift communication between registrars and CSCS, as well as enhance seamless data transmission.

Mr Olugbemi disclosed that Regconnect would give registrars total control by offering an entity-based operational structure where each entity manages its access rights and operations, in addition to the ability to validate data right from their offices. He praised the collaborative effort, noting the fact that the solution comes at no additional cost to the registrars and issuers.

The data exchange application and Regconnect solution are being run on a parallel deployment until December 2019, when total switch over to Regconnect will occur.

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Patricia
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Fixed Income

MTN Nigeria begins N100 billion commercial paper issuance today

MTN Nigeria Communications Plc proposed Commercial Paper Issuance Offer begins today and is scheduled to close on Thursday, June 4, 2020. 

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MTN Nigeria, MTN Nigeria Communications Plc. begins N100 billion commercial paper issuance today

MTN Nigeria Communications Plc has commenced its Commercial Paper (CP) Issuance (Series 1 & 2 of N50 billion each)  under its N100 billion CP issuance programme on Thursday.

In a statement issued by the company and seen by Nairametrics, the telco explained that the issuance has a tenor of 180 days (CP 1) and 270 days (CP 2) with a discount rate of 4.6890% – 4.8797% (CP1)  and 5.8500% – 6.000% (CP2).

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Nairametrics had reported a few days ago when the telecommunication company notified the Nigerian Stock Exchange about the issuance.

Why it matters: The issuance is important to the telco, as it intends using the proceeds to its working capital and general corporate purposes in Nigeria. This issuance under the CP Programme represents MTN Nigeria’s debut in the domestic debt capital market.

READ ALSO: Bond: Lagos to raise N100 billion for infrastructural development

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Details: Issuer;  MTN Nigeria Communications Plc.

Arranger: Chapel Hill Denham Advisory Limited.

Tenor: 180 days (commercial paper 1)     270days (commercial paper 2).

Discount Rate: 4.6890% – 4.8797% (commercial paper 1)    5.6078% – 5.7455% (commercial paper 2).

Implied Yield: 4.8000% – 5.0000% (commercial paper 1)   5.8500% – 6.0000% (commercial paper 2).

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Offer Open Date: Thursday, May 28, 2020.

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Offer Close Date: Thursday, June 4, 2020.

READ MORE: Nigerian Breweries set to raise N15bn through CP issuance

Settlement Date: Friday, June 5, 2020.

Minimum subscription: N1 million.

Issuance size: N100 billion (series 1 & 2 commercial paper issuance N50billion each).

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Issuer Rating: Aa+ (Augusto); AA (GCR).

Tax consideration: Free and clear of withholding Taxes.

(READ MORE: Economy: Local corporates taking advantage of the low yield environment  )

MTNN is the leading telecommunications operator in the largest telecoms market in Africa. The company is the largest mobile operator and undisputed market leader in Nigeria, as measured by total mobile subscribers (c. 70 million), active data users (c. 26.8 million), revenue (almost 50% of industry), and profit pool.

MTN, MTN Nigeria Communications Plc. begins N100 billion commercial paper issuance today

MTNN is well-positioned for the long term, with its unmatched investments in its infrastructure – most expansive 2G, 3G, and 4G network, largest fibre network (c. 29,000km) that spans across Nigeria, largest physical and digital distribution platform, and wide range of spectrum holdings – and the exciting market opportunity Nigeria brings.

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MTNN is rated Aa+ by Agusto & Co. which reflects the company’s history of strong financial performance – record revenue in excess of N1 trillion (largest revs by a listed corporate), stable and healthy operating profit metrics (+53% EBITDA margin), comfortably low leverage (0.4x Net Debt/EBITDA, 10.8x interest coverage) that is predominantly local currency, and strong free cash flow.

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Fixed Income

United Capital Plc raises N10billion in Series 1 Bond Issuance

The bond issuance adds to itsbimpressive portfolio of innovative and landmark transactions it has structured, and it once again highlights its capabilities in the successful execution of novel debt capital market transactions.

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United Capital: The good and the bad

United Capital Plc, has raised N10 billion in its Series 1 Bond issuance under a N50 billion Medium-Term Debt Programme registered with the Securities & Exchange Commission (SEC).
The capital raise places the company as the first Issuing House to issue a Corporate Bond in the history of the Nigerian Capital market.

The company’s Group CEO, Peter Ashade, explained that this action, being a first for any investment bank in the history of the Nigerian Capital market, strengthens United Capital’s track record as a force to reckon with in the investment banking terrain.

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READ ALSO: Reports: China may defer loans owed by Nigeria and others

He said, “With an oversubscription of 24% investor, we believe this milestone accentuates the confidence in our Institution, and its ability to diversify our corporate funding sources, provide innovative financial solutions and our unwavering commitment to our esteemed clients.”

In line with the company’s goals for the year 2020, it served as a book runner on the deal, advising on the transaction structure, securing relevant regulatory approvals, and implementing a marketing strategy for the bonds. Its role also included making a compelling business case for the issuance, amongst others.

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Babatunde Obaniyi, Managing Director, Investment Banking, said, “the bond issuance adds to the impressive portfolio of innovative and landmark transactions we have structured, and it once again highlights our capabilities in the successful execution of novel debt capital market transactions.”

READ ALSO: United Capital records 2% profit increase in Q3 2019

The transaction having a tenor of 5 years, scored a 124% subscription, “with huge commitments from a diversified institutional investors’ base including Pension Fund Administrators and other players in the financial service space.”

He also explained how the strong outcome of the transaction re-affirms the confidence of its buy-side investors’ as well as its leadership in the financial services landscape.

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Fixed Income

Here’s what should be expected in Nigeria’s fixed income market this week

“Going into next week, there is an OMO maturity coming in. So, that will help to ensure balance.”

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Fixed Income, Interbank Rates

The Nigerian fixed income market is expected to witness a moderate activity as well as moderate liquidity during the new week. This is according to Nkem Azinge, a Currency Trader at UBA who spoke to CNBC Africa.

According to her, the market is expected to witness an OMO maturity during the week which, by the way, is going to be a short trading week due to public holidays on Monday and Tuesday. The OMO maturity will help maintain balance, even as liquidity in the system will just be moderate.

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READ MORE: Banking: Surprise hike in CRR-Implications for banks   

“Going into next week, there is an OMO maturity coming in. So, that will help to ensure balance. It is a short trading week. So, liquidity will just be moderate,” she said.

Earlier on during the interview, Azinge explained why there was also relative activity in the fixed income last week. According to her, the OMO market witnessed “buying activity as offshore players looked to deploy idle cash. We also saw banks buy as the market opened liquid.”

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However, the trend reversed by Thursday because investors took advantage of lower yield in the market to “take profit in anticipation of the PRR debit that was expected” and CBN’s FX auction.

On the other hand, the bond market witnessed mixed sentiments last week. This is because while a number of people took profit on their auction, others sold off in anticipation of a possible increase in supply.

In the FX market, the CBN re-opened its whole bill auction by pumping as much as $72 million into the market. This helped to ensure liquidity in the market.

READ ALSO: Global oil supply to drop by 12 million b/d to 9 year low, covid-19 resurgence still a concern – IEA

Azinge noted that it had been more than two months since such an auction occurred, a situation that led to very limited supply in the FX market. Therefore, the auction was a welcome development even as it indicated that the apex bank is now ready to meet growing dollar demands by Nigerians.

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Note that the CBN’s Monetary Policy Committee (MPC) meeting is slated to take place on Thursday. This is also expected to influence activities in the fixed income market during the new week.

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Watch Azinge’s entire interview with CNBC Africa by clicking here.

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