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Wednesday, March 11, 2020

FCMB UNVEILS N100B MAIDEN COMMERCIAL PAPER


First City Monument Bank (FCMB) Limited, a member of the FCMB Group Plc, has concluded arrangements to unveil its maiden issuance under its N100 billion commercial paper (CP) issuance programme, TCP News Reports
In a regulatory filing yesterday, the bank stated that it would be raising N20 billion in the first tranche of the N100 billion CP programme. The net proceeds of the 269-day instrument will be used to support the bank’s short-term funding needs.
According to the bank, the CP will serve as additional funding sources for its operations.
Many companies have increasingly turned to CP to raise short-term debt capital as the primary equities market struggles with investors’ apathy.
Union Bank of Nigeria (UBN) had recently floated a N20 billion short-term debt issuance aimed at strengthening the working capital of the commercial bank.
UBN raised N20 billion through the issuance of 180-day and 268-day commercial paper (CP). The new issuance was issued under the bank’s N100 billion Commercial Paper (CP) Programme, which was launched in 2018.
The bank had issued its debut issuance of Series 1 and 2 through which it successfully raised N24.3 billion in January 2019. The new issuance, Series 3 and 4 is targeted at institutional investors including pension and non-pension asset managers, as well as eligible high net-worth investors.
Flour Mills of Nigeria Plc also raised N5 billion in new short-term capital through the issuance of commercial papers (CPs). Flour Mills of Nigeria raised up to N5 billion in the 11th series of its N100 billion CP programme.
Flour Mills of Nigeria offered 270-day CP with effective yield of 9.50 per cent and a discount rate of 8.8777 per cent. The maturity date for the debt issue is September 8.
Nigeria’s most capitalised quoted company and Africa’s largest cement producer, Dangote Cement Plc had in mid 2019 issued new commercial papers to raise N50 billion in new short-term capital. Dangote Cement raised N50 billion in the eighth to 10th series of its N150 billion CP programme. The leading cement company will use the net proceeds to support its short-term funding.
Dangote Cement offered 90-day CP with effective yield of 12.5254 per cent and a discount rate of 10.51 per cent under its 8th series. The 9th series CP was a 180-day instrument with effective and discount yield of 12.5254 per cent and 13.35 per cent respectively. The 10th series CP was a longer tenor 270-day CP with effective and discount yield of 12.6862 per cent and 14.00 per cent.

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