Dangote Cement, MTN Nigeria, Nigerian Breweries and nine other Industry leading Nigerian companies have raised a sum of N478.4 billion through Commercial Paper issuances between January and September 2020. Newsletter from Nigerian Investment Promotion Commission (NIPC) has revealed. 

Acccording to information sourced from all the major bond listings published during the year and also contained in the Nairametrics Deals Book, a compendium of various deals carried out within the Nigerian corporate space stated that the year 2020 has been a precarious year for the economy due to the dual effects of Covid-19 and the crash in oil prices.

Dangote Cement – Africa’s largest cement manufacturer and the most capitalized company on the Nigerian Stock Exchange, issued series 15 and 16 of its commercial paper in May 2020 and another series 17 and 18 in September 2020, summing up to N150 billion.

Series 15 and 16 had a tenor of 175 days and 266 days with a respective yield of 5% and 6%, while the issued amount was N34 billion and N66 billion under its N150 billion commercial paper issuance programme.

Series 17 had a tenor of 177 days and an implied yield of 4%, while series 18 had a tenor of 268 days with a 5% implied yield. They have a maturity date of 4th March 2021 and 3rd June 2021 respectively. According to the cement giant, the capital raised was aimed at funding short-term working capital requirements, as well as general corporate purposes. It is also worth noting that Dangote Cement also announced the successful issuance of N100 billion series 1 fixed rate Senior Unsecured Bonds in April 2020, which is due for April 2025.


MTN Nigeria, the second most capitalized company on the Nigerian Stock Exchange completed the issuance of N100 billion commercial paper in June 2020. The Telecom company issued commercial papers in two series (series 1 & 2) with the intent of raising N50 billion, but due to the over -subscription of the offer, opted to raise the bar by making an issuance of N100 billion

Series 1 had a tenor of 180 days and 270 days (CP2) with an effective yield of 4.9% for a N20 billion size (CP1) and 5.95% for an N80 billion size (CP 2) respectively. An issuance, which represents MTN Nigeria’s debut in the domestic debt capital market. According to MTN, the proceeds from the Commercial paper issuance was aimed at supporting the company’s working capital and general corporate purposes.

Nigerian Breweries with N93 billion raised, been the largest brewing company in Nigeria listed commercial papers over 7 series (series 5 – 11). Series 5 and 6 of the programme opened on the 3rd of February, 2020; Series 7 and 8 opened on 6th April, 2020; while Series 9 – 11 opened on 26th October, 2020.

Series 5 had a tenor of 180 days, Series 6 (270 days) raising up to N45 billion, Series 7 (182 days), Series 8 (270 days), raising N48 billion, Series 9 (120 days), Series 10 (183 days); while Series 11 was for a tenor of 240 days with an undisclosed issue amount. The Company stated that the Commercial papers programme was aimed at supporting the Company’s cost management initiatives with the overall aim of reducing its cost of fund, which also serves as an additional source of funding for the Company.

Flour Mills of Nigeria, the prominent food and agro-allied group announced the issuance of its series 13 & 14 of N30 billion Commercial paper in April 2020, under its N100 billion Programme.

According to information from the company’s disclosure released on the Nigerian Stock Exchange (NSE), proceeds realized from the issuance was targeted at strengthening its balance sheet. Series 14 of the issuance had a tenor of 269 days with an implied yield of 7.75%; while its maturity date started at 21st January 2021. Breakdown of series 15 was not disclosed.

Union Bank announced in January, the issuance of N20 billion Series 3 and 4 of its Commercial Paper Programme with a respective 180 days and 268 days tenor.

Meanwhile, information from FMDQ showed a greater amount of issuance as a total of N8.89 billion was issued in its third series, while the fourth series raised up to N17.39 billion. The disclosure stated that the fund was intended to provide the Bank with further working capital.

Others are: FCMB – N20 billion; Sterling Bank – N15 billion; Mixta Real Estate – N11.01 billion; CardinalStone Partners – N7.1 billion; Coronation Merchant Bank – N6.96 billion; United Capital – N5.3 billion and Guinness Nigeria – N5 billion.

The report explained that despite the larger economy reeling from the crsis, the corporate world has recorded a massive improvement in their ability to raise capital in the debt market.

According to the report, 12 Nigerian companies raised the fund through Commercial Paper issuances from the capital market in nine months, despite the economic downturn experienced in Nigeria as a result of the Covid-19 induced lockdown and halt in most business activities.

The major driving force for the string of capital raise was due to the low interest rates attributable to risk free securities such as treasury bill, FGN bonds and CBN OMO bills. With interest rates low, corporates have moved to fill the gap by issuing debt securities at interest rates that are higher than risk free securities but affordable compared to previous times.

It is no wonder some of the largest businesses in the country have tapped into the bond market to fill in the demand for fixed income debt securities. While some companies used the funds to finance working capital, for others it was a useful bridge to forge ahead of long term capital once the Covid-19 Pandemic receedes.

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