Following the commitment to foster economic development by championing and supporting market-driven strategic initiatives, the Nigerian Debt Capital Market (DCM) has continued to witness significant activity with diverse corporate institutions, tapping the market as an efficient alternative to meeting their funding and liquidity requirements.
Four Nigerian corporates issued corporate bonds worth N162.51 billion in order to improve their balance sheet and scale up their operations during the month of September 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 month. The information was sourced from news reports, and press releases amongst other reliable sources.
Union Bank: N100 billion
FMDQ Exchange through its Board Listings and Markets Committee, during the month, approved the registration of the Union Bank Plc N100.00 billion Commercial Paper (CP) Issuance Programme on its platform in September 2022.
- Union Bank of Nigeria is one of Nigeria’s long-standing banking institutions that offers a portfolio of banking services to individuals, small and medium-scale enterprises, and commercial and corporate clients.
- The registration of the CP Programme, which is sponsored by UCML Capital Limited (Lead Sponsor), Standard Chartered Capital & Advisory Nigeria Limited and Renaissance Securities (Nigeria) Limited – all Registration Members (Quotations) of FMDQ Exchange, tactically position Union Bank to raise short-term finance from the Nigerian debt markets easily and quickly at a time in the future it determines suitable, through CP issues, within the CP Programme limit.
- Fidelity Bank Plc recently entered into a binding agreement to acquire a 100% equity stake in Union Bank UK Plc.
- According to a disclosure signed by Ezinwa Unuigboje, the Company Secretary on the proposed acquisition of a 100% equity stake in Union Bank UK Plc by Fidelity Bank Plc, the transaction is subject to the approval of the Prudential Regulatory Authority of the United Kingdom.
- Fidelity Bank said the development is in line with its expansion drive beyond the Nigerian market to enable it to deliver to its growing client.
Julius Berger: N30 billion
Julius Berger established an N30 billion Commercial Paper Issuance Programme (CP Programme) approved by the FMDQ Securities Exchange Limited on September 21 2022.
- According to the disclosure signed by C.E. Madueke, Julius Berger may from time to time issue commercial papers, denominated in Nigerian Naira, in separate series or tranches under this programme.
- The company believe that the establishment of the CP Programme will enhance its long-term strategy to strengthen its competitive advantage.
- It stated, “Julius Berger has established an N30 billion Commercial Paper Issuance Programme approved by the FMDQ Securities Exchange Limited on September 21 2022, under which Julius Berger may from time to time issue commercial papers, denominated in Nigerian Naira, in separate series or tranches subject to compliance with all relevant laws and in accordance with the terms and conditions contained in the CP Programme Memorandum and applicable pricing supplement.”
- It added that the establishment of the CP Programme will enhance Julius Berger’s long-term strategy to strengthen its competitive advantage in the construction sector and each issuance under the CP Programme will support the company’s short-term working capital and funding requirements.
- The repayment of all obligations under each series or tranches of notes issued under the CP Programme will be funded from the company’s cash flow or such other means as may be indicated in the applicable pricing supplement.
- Stanbic IBTC Capital Limited acted as the lead arranger while FCMB Capital Markets Limited acted as the joint arranger in connection with the establishment of the CP Programme. Banwo & Ighodalo also acted as solicitors for the transaction.
Johnvents Industries: N30.00 billion
FMDQ Securities Exchange Limited approved the registration of the Johnvents Industries Limited N30.00 billion Commercial Paper (CP) Programme on its platform, in September 2022.
- Johnvents Industries Limited is a wholly indigenous-owned agribusiness that provides modern information and communication tools, macro-loans, and farm inputs, such as seedlings and fertilisers, to support farmers and finance their businesses in Nigeria, via its subsidiaries – Johnvents Procurements, Johnvents Cocoa Factory and Johnvents AgriTrade.
- The CP Programme, which is sponsored by United Capital PLC – a Registration Member (Quotations) of FMDQ Exchange, will avail the Issuer, Johnvents Industries, the opportunity to raise short-term finance from the Nigerian debt markets through CP issuances within the Programme limit.
Coleman Technical: N2.51
Coleman Technical Industries Limited during the period under review issued N2.51 billion Series 5 and N7.50 billion Series 6 Commercial Papers (CPs) under its N20 billion CP Issuance Programme on the Exchange’s Platform.
- Coleman Technical Industries Limited is West Africa’s producer and distributor of electrical wires and cables.
- The quotation of these CPs, sponsored by Coronation Merchant Bank Limited (Lead Sponsor), Afrinvest Capital Limited, CardinalStone Partners Limited, FSDH Capital Limited and SFS Financial Services Limited – all Registration Member (Quotations) of FMDQ Exchange, strategically positions the Issuer to raise short-term finance easily and quickly from the Nigerian debt markets.
- Speaking on the successful issuance of the CPs, the Managing Director/Chief Executive Officer, Coleman Technical Industries Limited, Mr George Onafowokan, stated “we are delighted to have successfully concluded our series 5 & 6 CP issuance in the Nigerian debt markets.
- The issuance comes at a positive time for Coleman, on the heels of strong 2022 first-half earnings and continuing success in our capital management program. Diversifying our funding sources with this CP issuance at a competitive rate will further enable us to achieve our strategic objectives. We are pleased by the success of the CP issuance and grateful to the investor community for supporting the transaction”.
- Also, the Chief Executive Officer, Coronation Merchant Bank Limited, Mr Banjo Adegbohungbe, stated “we are pleased to have supported Coleman Technical Industries Limited, in this largest commercial paper issuance by a cable and wires company in Nigeria.
- This issuance underscores the critical role of the Nigerian financial market in providing funding to the private sector for sustainable development. This collaboration is in line with our commitment to adding value to our customers and enabling them to achieve their strategic goals. We thank the board and management of Coleman for their commitment and dedication throughout the process and the investing community for supporting the issue.”