9 companies raise N249bn from CPs in 6 months

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A total of N248.880 billion has been issued by nine companies through issuance of Commercial Papers in order to improve their balance sheet and scale up their operations during the half-year ended June 30, 2022.

According to investopedia, Commercial Paper (CP) is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities on commercial paper typically last several days, and rarely range longer than 270 days.

The issuance consisted of two tenors – a 184-day series issuance priced at a 7.50 per cent yield and a 254-day Series 2 issuance priced at an 8.50 per cent 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, 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.

The Chief Executive Officer, Lekki Gardens Estates Limited, 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 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.

According to disclosures filed to the Nigerian Exchange, the CP Issuance comprised two tenors; a 90-day Series 1 issuance priced at eight per cent yield, and a 181-day Series 2 issuance which priced at 8.25 per cent 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.

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