Nine Nigerian corporates issued commercial papers worth N248.880 billion in order to improve their balance sheet and scale up their operations during the half-year ended June 30, 2022.
Nairametrics tracks major deals consummated in the Nigerian corporate scenes with emphasis on companies that have their major operations in the country or with significant interest in Nigeria.
Below is a compilation of deals announced during the half-year. The information was sourced from news reports, press releases amongst other reliable sources.
MTN Nigeria issue N127 billion Commercial Paper
MTN Nigeria Communications Plc led with the issuance of a historic N127 billion Series 1 & 2 Commercial Paper (CP) under its registered N150 billion programme.
- The issuance consisted of two tenors – a 184-day series issuance priced at a 7.50% yield and a 254-day Series 2 issuance priced at an 8.50% yield.
- According to the telecommunication giant, the issuance was in line with its strategy to diversify financing options, with the proceeds being deployed towards working capital and general corporate purposes.
- Speaking at the signing ceremony, the Chief Executive Officer, MTN Nigeria Communication, Mr Karl Toriola explained that the N127 billion CP issuance would go into the record books as the largest CP issuance in Nigeria.
- According to him, “The success of our CP issuance is a clear demonstration of the strength and acceptance of the MTN brand, and the trust placed by the investor community in MTN Nigeria’s company’s leadership, strong financial performance and corporate strategy.”
- He noted that MTN Nigeria with the completion of the N127 billion CP aimed at improving customer services and high-quality bouquet services that included 5G spectrum that awaits regulatory approval.
- “This CP allows us funding at an efficient rate to continue our products deployment and distribution network,” he said.
Lekki Gardens Estate issued N25.00 billion Commercial Paper
Lekki Gardens Estates Limited signed a N25 billion commercial paper approved for the company by the FMDQ Security Exchange Limited.
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- The Chief Executive Officer, Lekki Gardens Estates Limited, Dr. Richard Nyong, during the ceremony, described the approval for the registration of the commercial paper issuance programme by FMDQ Exchange on its platform as a big step for the company, saying it would help to deepen its market offering to customers and unlock value for all stakeholders.
- “This type of funding will help us assist our customers with pseudo-mortgage support. And it helps our business to strengthen the delivery system that we already have ongoing. That is the key thing we are trying to do- making our business stronger, more solid, and strategic in its ability to deliver to our esteemed customers,” he added.
NOVA Merchant Bank issued N20 billion Series 1 & 2 Commercial Paper
NOVA Merchant Bank during the period under review announced the issuance of N20 billion Series 1 & 2 Commercial Paper issuance under the Nova Merchant Bank Limited N50 billion CP Programme.
- The bank noted that the proceeds from this Commercial paper will be used to fund short-term working capital requirements and for general corporate purposes.
- The offer which opened on the FMDQ platform on Tuesday, February 8, 2022, has a tenor of 182 days for Series 1 while the Series 2 shall be for 270 days.
- The Managing Director/ Chief Executive Officer of NOVA Merchant Bank, Mr. Nath Ude, said, “The successful listing of our N50billion CP Programme on the FMDQ platform further gives credence to NOVA Merchant Bank’s confidence in the Nigerian debt capital market and puts the Bank in a position to broaden potential funding sources and create superior value in the financial market it serves. We remain driven by our aspiration to transform the African financial services landscape with fresh thinking and innovative solutions”.
UAC completes maiden N18.7 billion Commercial Paper issuance
UAC of Nigeria Plc during the period under review completed its N18.7 billion Series 1 and 2 Commercial Paper issuance under its established N45 billion programme.
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- According to disclosures filed to the Nigerian Exchange, the CP Issuance comprised two tenors; a 90-day Series 1 issuance priced at 8% yield, and a 181-day Series 2 issuance which priced at 8.25% yield.
- The company said the CP issuance was 3.8x subscribed and was part of the intra-group treasury arrangement between UAC and its subsidiaries aimed at meeting short-term working capital requirements.
- Funke Ijaiya-Oladipo, group finance director of UAC, said, “We are delighted to have successfully completed our first CP Issuance in the Nigerian debt market. This is truly a testament to our Company’s strength, the sustainability of our Group’s brands and the trust displayed by the investing community.
- “It is without a doubt that the success of this issuance provides an avenue to optimize our funding cost while continuing to drive our strategic initiatives as an organization. We are pleased by the success of the CP Issuance and grateful to all parties involved in the transaction,” he said.
FBNQuest Merchant Bank issued N15 billion Commercial Paper
FBNQuest Merchant Bank Limited, a subsidiary of FBN Holdings Plc issued commercial paper worth N15 billion to investors.
- The discount rate for the six-month paper is 7.9275 per cent and has an implied yield of 8.2500 per cent, while the discount rate for the nine-month paper is 8.4382 per cent and an implied yield of 9.0000 per cent.
- The Commercial Paper according to the bank will help the organisation meet its short-term liquidity needs and grant them access to alternative and cheaper sources of funding.
RMB Nigeria issued N15 billion Commercial Paper
The Rand Merchant Bank (RMB) Nigeria Limited sold N15 billion in Commercial Paper to investors.
- The exercise started on Friday, April 1, 2022, and closed on Wednesday, April 6, 2022, with the paper offered in two tenors of 182 days and 270 days, according to details of the exercise, which has FCMB Capital Markets Limited as the dealer.
- The commercial paper sale, which is under the N80 billion programme of the issuer, is being sold to investors in series 1 and 2.
- The 182-day maturity comes with a discount rate of 7.4617 per cent and an implied yield of 7.7500 per cent, while the 270-day tenor comes with a discount rate of 7.9972 per cent and an implied yield of 8.5000 per cent.
- According to the financial institution, the issuance was as a result of the need to get funds for its short-term working capital requirements and for general corporate purposes.
- RMB Nigeria was authorised by the Central Bank of Nigeria (CBN) to carry out merchant banking operations as well as financial advisory, corporate banking, and trading.
- The lender is a subsidiary of FirstRand Group, a financial services group publicly listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange.
Veritasi Homes listed N10 billion Commercial Paper
Veritasi Homes and Properties signed its Commercial Paper (CP) programme worth N10.00 billion, which was approved through the Board Listings and Markets Committee of the Financial Market Dealers Quotation (FMDQ) Securities Exchange.
The CP Programme positions the company to raise finance for a tenor up to 270 days from the debt market at a time in the future it deems suitable.
- According to the founder and CEO of Veritasi Homes and Properties Limited, Adetola Nola, the successful signing of the commercial paper programme was a significant feat for the company.
- “We are delighted that the proceeds from the issuance of the CP will be applied to develop superior real estate projects designed for clients at home and in the diaspora,” he said
United Capital Plc issued N12.48 billion Series 8 Commercial Paper
The United Capital Plc during the period issued N12.48 billion Series 8 Commercial Paper (CP) under its N50.00 billion CP Issuance Programme on its platform.
- According to the company, the proceeds from the quotation of this CP, which is co-sponsored by FSDH Capital Limited, UCML Capital PLC and NOVA Merchant Bank Limited – all Registration Members (Quotations) of FMDQ Exchange, will be used by the Issuer to finance short-term working capital requirements.
Neveah issued N5.7 billion Series 3, Series 4 Commercial Paper Programme
Neveah Limited during the period announced the quotation of its N5.7 billion Series 3 and Series 4 Commercial Paper Issuances on the FMDQ Exchange.
- According to a statement from the company, both Series 3 and 4 CP issuances were well received and subscribed to by a wide universe of investors including asset managers and High Net worth Individuals (HNIs).
- The issuance of these Series is in line with the Company’s strategic objective to evolve as a leading dealer and exporter of world-class quality agro-commodities and minerals to its clients while ensuring a transparent business approach.
- The debt financing rounds came on the heels of ratings of A1 (short-term) and BBB (long-term) with a positive outlook retained from DataPro Ratings, coupled with the strategic partnership and guidance of United Capital Plc.
- According to the Chief Executive Officer, Mr. Ibidapo Lawal “the commercial paper issuances will further place the company in a strategic position to meet its contractual obligations with off-takers while building its strength as a leader in the international commodities export market.”