By Samuel Bankole
Coronation Merchant Bank (CMB) Limited and MTN Nigeria are in the debt market to raise a total of N125 billion in both bonds and commercial paper, according to their financial advisors.
While Coronation is offering N25 billion in Series 15 (180-day tenor) and 16 (268-day tenor) commercial paper under its N100 billion commercial paper programme, MTN Nigeria is offering N100 billion in 7-year bonds.
CMB debt issuance started on April 7 and is expected to close on April 13.
The bank said the proceeds of the issue will be used to finance short-term working capital requirements.
The 180-day tenor and 268-day tenor Commercial Papers offer yields of 7.2503 percent and 9.6368 percent, respectively.
The issuer is assigned an A+ rating by Augusto, A- rating by GCR, and B- rating by Fitch.
Also, MTN Nigeria’s 7-year bond is being issued under its series 1 bond N200 billion bond issuance programme.
The issue is scheduled to close on Friday, April 16, 2021, and the bonds will be listed on FMDQ Securities Exchange Limited.
The indicative yield is in the range of 11.50 percent -12.00 percent.
MTN Nigeria is one of Nigeria’s highest-rated firms, with a corporate rating of Aa by Agusto and AA by GCR.
Many Nigerian companies have resorted to tap the debt market and take advantage of the low yield regime in the country to fund their operations.
In March, MTN Nigeria launched the issuance of N100 billion in Commercial paper of 180-day and 270-day.
Also in March, Coronation Merchant Bank Limited concluded the issuance of N15 billion commercial paper under its series 13 and 14.
Commercial paper, also called CP, is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year.
They are typically issued by large banks or corporations to cover short-term receivables and meet short-term financial obligations, such as funding for a new project.
Many Nigerian companies have resorted to issuing Commercial Paper since last year when yields on fixed-income fell below the Central Bank of Nigeria (CBN) benchmark rate.