Due to the relative inactive state of the primary market debt issues, Commercial papers (CPs) as well as Series Senior Unsecured fixed rate bonds have become the new trend in the primary market space with over N50 billion in CPs recorded on the FMDQ Securities Exchange in one week.
CPs are short-term debt financing securities (no longer than 270 days in tenor) consisting of unsecured and discounted promissory notes issued by large corporations with good credit ratings, which can be readily traded and looking at recent developments, it is safe to say that it is providing issuers with renewed opportunity to grow their businesses and restore investors’ confidence, simultaneously contributing to the overall development of the Nigerian debt capital market (DCM).
Daily Sun had reported that as of April and May 2021, there are about 51 registered CP programmes on the platform of the FMDQ Exchange worth N3.46 trillion in value. However, the exchange, as of last week, listed CPs worth N50 billion as well as MTN Nigeria’s N110bn Series 1 Fixed Rate Bond on its platform.
In support of the development of the DCM, the exchange, through its Board Listings and Markets Committee, approved the registration of the Viathan Funding Plc’s N20 billion CP Programme. According to the FMDQ, Viathan Funding Plc is a special purpose vehicle established by Viathan Engineering Limited to raise capital from the Nigerian DCM.
Speaking on the successful CP Programme registration, the Co-Founder/CEO, Viathan Funding Plc, Mr. Habeeb Alebiosu, stated that this is another step towards positioning the company as a leading player in the integrated energy vertical.
He said: “As we look to consolidating our growth thus far, access to capital in form of liquidity support instruments is crucial. This CP is a strategic funding initiative which will enable the much-needed agility required for containing lead times associated with infrastructure projects. We remain steadfast in our objective to unlock value for our stakeholders, as we develop the requisite infrastructure to facilitate generation, distribution of uninterrupted, environmentally clean electricity and to accelerate gas utilisation in Nigeria”.
Furthermore, in its bid to continue supporting institutional growth and stimulate continuous development of the economy at large, the exchange admitted DLM Capital Group Limited’s N20 billion, Neveah Limited’s N10 billion CP Programme and approved the listing of the MTN Nigeria’s N110 billion Series 1 Senior Unsecured Fixed Rate Bond under its N200 billion bond issuance programme; all on the exchange’s platform.
In separate statements, the Group Chief Executive Officer/Managing Director, DLM Capital Group Limited, Sonnie Ayere, stated that Group’s funding programme is an important strategic move towards achieving DLM Capital Group’s developmental mandate of supporting the sustainable growth of small & medium-sized corporates across the country in addition to supporting our growing retail and consumer finance business.
For his part, the Chief Executive Officer, MTN Nigeria, Karl Toriola, said MTN Nigeria is very proud of this landmark transaction, which is the first ever telecommunication bond issued in Nigeria and the largest corporate bond issuance in 2021.
Toriola added that the Nigerian debt capital market has given the company the opportunity to diversify its funding sources further and enabled the firm to extend the maturities of its debt portfolio to match infrastructure investments.
He said: “Investors’ strong support for this transaction, given the challenging economic environment, is a reflection of their confidence in MTN Nigeria’s long-term strategy, the management team, the depth of the market, and the overall growth in telecommunications industry, and we do appreciate the support”.
The FMDQ Group, on its own part, said it would continue to sustain its efforts in supporting issuers with tailored financing options to enable them achieve their strategic goals, deepen and effectively position the Nigerian DCM for growth in support of the realisation of a globally competitive and vibrant economy.