First City Monument Bank has announced the issuance of a commercial paper worth N30 billion, as part of its efforts to generate additional source of short-term funds for the bank.
The disclosure was signed by FCMB Group’s secretary, Olufunmilayo Adedibu, and sent to the Nigerian Stock Exchange, as seen by Nairametrics.
- The Commercial Paper (CP) has a tenor of 260 days and is part of a larger effort by the bank to raise a total of N100 billion through its CP issuance programme.
What they are saying
A part of the notification sent to NSE reads:
- “FCMB Group Plc (“FCMB”) hereby notifies the Nigerian Stock Exchange (“NSE”) and its esteemed shareholders that one of its subsidiaries, First City Monument Bank Limited (the Bank) is undertaking a Commercial Paper Issuance (“CP”) under its N100 billion-naira CP programme.”
What you should know
- FCMB had earlier in March 2020 issued a N20 billion worth of commercial paper as reported by Nairametrics. In lieu of this, the latest notice raises the total sum of Commercial Paper issuance by the bank to N50 billion, out of its benchmark target of N100 billion.
- In a similar vein, Nairametrics also reported that Dangote Cement, MTN, Nigeria Breweries and 9 other firms raised a total sum of N478.4 billion from commercial paper issuance between January and September, 2020.
- According to Investopedia, Commercial paper is a type of unsecured, short-term debt instrument, issued by corporations to meet its short-term liabilities. It is unsecured because it is usually not backed by any form of collateral.
- Commercial papers are usually targeted at institutional investors, such as Pension Fund Administrators and non-pension asset managers. Some high net-worth investors are also eligible to apply.