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Debt Securities

Dangote Cement, MTN, Nigerian Breweries, 9 others raise N478.4 billion from commercial papers

Nigerian companies raised a sum of N478.4 billion through Commercial Paper issuances between January and September 2020.



Dangote Cement, MTN, Nigerian Breweries, 9 others raise N478.4 billion from commercial papers

Dangote Cement, MTN Nigeria, Nigerian Breweries, and nine others raised the sum of N478.4 billion from commercial paper issuances between January and September 2020.

This is according to information sourced from all the major bond listings published during the year and also contained in the Nairametrics Deals Book, a compendium of various deals carried out within the Nigerian corporate space. 

READ: Stamp Duty on Nigerian Stock market transactions pegged at 0.08% from December 7

  • The year 2020 has been a precarious year for the economy due to the dual effects of Covid-19 and the crash in oil prices.
  • Despite the larger economy reeling from the crsis, the corporate world has recorded a massive improvement in their ability to raise capital in the debt market.
  • According to the report, 12 Nigerian companies raised the fund through Commercial Paper issuances from the capital market in nine months, despite the economic downturn experienced in Nigeria as a result of the Covid-19 induced lockdown and halt in most business activities. 

READ: Nigerian pension funds increase exposure to foreign money market funds

What is driving the raise?

The major reason for the string of capital raise was due to the low interest rates attributable to risk free securities such as treasury bill, FGN bonds and CBN OMO bills.

  • With interest rates low, corporates have rmoved to fill the gap by issuing debt securities at interest rates that are higher than risk free securities but affordable compared to previous times.
  • It is no wonder some of  the largest businesses in the country have tapped into the bind market to fill in the demand for fixed income debt securities.
  • While some companies used the funds to finance working capital for others it was a useful bridge to ahead of long term capital once the Covid-19 Pandemic receedes.

READ: FMDQ admits Axxela funding of N11.5 billion bond on its platform

Dangote Cement (N150 billion) 

Africa’s largest cement manufacturer and the most capitalized company on the Nigerian Stock Exchange, issued series 15 and 16 of its commercial paper in May 2020 and another series 17 and 18 in September 2020, summing up to N150 billion.  

  • Series 15 and 16 had a tenor of 175 days and 266 days with a respective yield of 5% and 6%, while the issued amount was N34 billion and N66 billion under its N150 billion commercial paper issuance programme. 
  • Series 17 had a tenor of 177 days and an implied yield of 4%, while series 18 had a tenor of 268 days with a 5% implied yield. They have a maturity date of 4th March 2021 and 3rd June 2021 respectively. 
  • According to the cement giant, the capital raised was aimed at funding short-term working capital requirements, as well as general corporate purposes. 
  • It is also worth noting that Dangote Cement also announced the successful issuance of N100 billion series 1 fixed rate Senior Unsecured Bonds in April 2020, which is due for April 2025. 

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MTN Nigeria (N100 billion) 

The second most capitalized company on the Nigerian Stock Exchange completed the issuance of N100 billion commercial paper in June 2020.

  • MTN Nigeria issued commercial papers in two series (series 1 & 2) with the intent of raising N50 billion, but due to the oversubscription of the offer, opted to raise the bar by making an issuance of N100 billion
  • Series 1 had a tenor of 180 days and 270 days (CP2) with an effective yield of 4.9% for a N20 billion size (CP1) and 5.95% for an N80 billion size (CP 2) respectively. An issuance, which represents MTN Nigeria’s debut in the domestic debt capital market. 
  • According to MTN, the proceeds from the Commercial paper issuance was aimed at supporting the company’s working capital and general corporate purposes. 

READ: Union Diagnostics calls shareholders to update records with company registrars

Nigerian Breweries (N93 billion) 

The largest brewing company in Nigeria listed commercial papers over 7 series (series 5 – 11).

  • Series 5 and 6 of the programme opened on the 3rd of February, 2020; Series 7 and 8 opened on 6th April, 2020; while Series 9 – 11 opened on 26th October, 2020. 
  • Series 5 had a tenor of 180 days, Series 6 (270 days) raising up to N45 billionSeries 7 (182 days), Series 8 (270 days), raising N48 billionSeries 9 (120 days), Series 10 (183 days); while Series 11 was for a tenor of 240 days with an undisclosed issue amount. 
  • The Company stated that the Commercial papers programme was aimed at supporting the Company’s cost management initiatives with the overall aim of reducing its cost of fund, which also serves as an additional source of funding for the Company. 

READ: Dangote Cement shareholders approve N272.6 billion dividend payout

Flour Mills of Nigeria (N30 billion) 

The prominent food and agro-allied group announced the issuance of its series 13 & 14 N30 billion Commercial paper in April 2020, under its N100 billion Programme. 

  • According to information from the company’s disclosure released on the Nigerian Stock Exchange (NSE), proceeds realized from the issuance was targeted at strengthening its balance sheet.
  • Series 14 of the issuance had a tenor of 269 days with an implied yield of 7.75%; while its maturity date started at 21st January 2021. Breakdown of series 15 was not disclosed. 

READ: MTN Nigeria Communications Plc announces N100 billion commercial paper issuance

Union Bank (N20 billion) 

  • Union Bank announced in January, the issuance of N20 billion Series 3 and 4 of its Commercial Paper Programme with a respective 180 days and 268 days tenor. 
  • Meanwhile, information from FMDQ showed a greater amount of issuance as a total of N8.89 billion was issued in its third series, while the fourth series raised up to N17.39 billion. 
  • The disclosure stated that the fund was intended to provide the Bank with further working capital. 

READ: Union Bank issues series 3 & 4 Commercial Paper, to raise N20 billion 

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  • FCMB – N20 billion 
  • Sterling Bank – N15 billion 
  • Mixta Real Estate – N11.01 billion 
  • CardinalStone Partners – N7.1 billion 
  • Coronation Merchant Bank – N6.96 billion 
  • United Capital – N5.3 billion 
  • Guinness Nigeria – N5 billion 

READ: United Capital Plc raises N15 billion through Commercial Paper

 About Nairametrics deals book

Nairametrics deals book summarises most of the corporate deals announced in Nigeria. It is a compilation of official press releases and media reports sourced by Nairalytics, the data and research arm of Nairametrics. 

You can download the latest edition here 

Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

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Debt Securities

DMO announces May 2021 FGN savings bond offer for subscription

The DMO has announced the offer for subscription of the May 2021 Federal Government Savings Bond to investors.



The Debt Management Office (DMO), on behalf of the Federal Government has announced the offer for subscription of the May 2021 Federal Government Savings Bond to investors.

This disclosure is contained in a circular issued by the DMO on May 3, 2021, and can be seen on its website noting that there are 2-year and 3-year savings bonds.

A breakdown of the bonds shows that the 2-year FGN savings bond will be due on May 12, 2023, at 7.753% per annum and the 3-year FGN Savings Bond which will be due on May 12, 2024, at 8.753% per annum.

The offer has an opening date of May 3, with a closing date of May 7, while the settlement date is May 12, with the coupon payment dates as follows: August 12, November 12, February 12 and May 12.

The circular also states that the unit of sale is N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000

It also states that the interest is payable quarterly with the redemption expected to be in bullet payment on the maturity date.

In case you missed it

It can be recalled that last month, the DMO on behalf of the Federal Government, offered for subscription April 2021, Federal Government Savings Bond to investors.

The offer consisted of a 2-Year FGN Savings Bond due April 14, 2023, at 5.522% per annum and a 3-year FGN Savings Bond due April 14, 2024, at 6.522% per annum.

The opening date was April 6, 2021, with the closing date on April 9, 2021, settlement date on April 14, 2021, and the coupon payment dates on July 14, October 14, January 14, and April 14.

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Debt Securities

CBN’s N88 billion treasury bill auction yesterday was oversubscribed by 174.62%

At the end of the auction, one-year treasury bills sold for 9.75% per annum.



Some experts are uncertain of what to expect from money markets in H2 2020

The Central Bank of Nigeria’s (CBN) Treasury Bills Auction worth N88.46 billion was oversubscribed by 174.6% yesterday. The stop rates for the 91 and 182-day tenor bills fixed at 2.00% and 3.50% respectively.

The stop rate of the 364-day tenor bill was pegged at 9.75% according to the result of the NTB auction.

The apex bank recorded N242.94 billion in total subscription, as the treasury bill auction was oversubscribed by 174.62%, however, T-bills worth N88.46 billion were provided across the 91-day, 182-day and 364-day tenors at the primary auction.

At the end of the auction, bills worth about N129.46 billion were allotted to investors.

READ: CBN’s N154.38 billion T-bills auction over subscribed by 46% as rates fall marginally  

Demand for Treasury Bills Surge

Demand for Treasury Bills has surged in recent months as yield-hungry investors scamper away from equities into risk-free government securities. While 2020 was marred with ultra-low interest rates on fixed income securities like Treasury Bills, yields have spiked in recent weeks to the surprise of investors.

With inflation rate galloping past 18% the pressure to flee the naira appears to have forced the central bank to revise its monetary policy strategy, allowing rates to rise.

READ: CBN, First Bank on collision course over removal of MD/CEO

Summary of the NTB Auction today

The 91-day bill was undersubscribed by 7.51% as it received a subscription of N10.53 billion, against an initial offer of N11.39 billion.

The 182-day tenor bill on the other hand performed well, as it was oversubscribed by 50.87% with an impressive subscription of N9.05 billion which was received yesterday, against an offer of N223.35 billion.

The 364-day tenor bill recorded the highest subscription with an oversubscription rate of 214.25%, as investors’ total subscription was valued at N223.35 billion, relative to an initial offer of N71.07 billion.

READ: U.S Government makes a premium selling Bitcoin

The breakdown of the allotment

At the close of the auction yesterday, about N7.19 billion of the 91-day tenor bill was allotted, lower than the initial offer of N11.39 billion, while N6 billion worth of the 182-day bill was allotted to investors.

With the settlement for the bill pegged for the 29th of April 2021, about N116.27 billion of the 364-day tenor bill was also allotted to investors.

The oversubscribed bills confirm the huge demand for risk-free government securities amidst a dearth of sizeable investment funds.

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READ: Bank of England considers digital currency

What you should know

  • The treasury bills were auctioned in a Dutch auction structure, as the price of the offerings were set after bids were received to determine the highest price at which the total offering could be sold.
  • This provided investors with the opportunity to place bids for the amount they were willing to buy in terms of quantity and price.
  • The range of bids was placed at 1.99 and 10.00 for the 91-day tenor; 3.49 and 10.00 for the 182-day tenor, 8.8943 and 15.00 for the 364-day tenor.

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