BY BAMIDELE FAMOOFO
With companies requiring short-term capital to stay afloat, 20 companies raised N421.7billion worth of Commercial Paper on FMDQ Exchange platform between January and December of 2021, FMDQ trading data has revealed.
The data, which was made available by FMDQ Exchange showed that 36 companies registered CP worth N1.806 trillion and quoted N421.7billion.
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.
Due to its relatively short maturity period, CP is referred to as low-risk investments, and offering competitive returns to investors in compensation for the issuer’s credit risk.
The 20 companies that consist of manufacturing, telecommunication, oil & gas, banks, health, agriculture, among sectors have raised CPs on the FMDQ Exchange platform in the period under review.
Analysis of the activities at the CPs market showed that Coronation Merchant Bank Limited in the 12 months of 2021 raised N74.54billion, one of the highest CPs on FMDQ Exchange followed by MTN Nigeria and Dangote Cement Plc that raised N73.51billion and N41 billion respectively.
FMDQ Exchange in February admitted CP valued at N2.34 billion of Coronation Merchant Bank and in March, it issued N14.13 billion CP.
The merchant bank in April issued N21.62billion in CPs but for May 2021, it was N11.46billion. However, in August, the company issued N25billion CPs.
Coronation Merchant Bank has N100 Billion CP issuance programme on FMDQ Exchange.
FMDQ in 2021 approved the quotation of the MTN Nigeria Communications Plc N19.77 billion Series 3 and N53.74 billion Series 4 CPs under its N200 billion CP Issuance Programme.
Dangote cement in November 2021 quoted a total of N41 billion CP under its N150billion CP issuance programme on its platform.
FMDQ Exchange had announced the quotation of the Dangote Cement N15.20 billion Series 1, N7.96 billion Series 2, and N17.84 billion Series 3 CPs
The proceeds from the Dangote Cement Series 1 – 3 CPs, which were sponsored on the Exchange by Stanbic IBTC Capital Limited – a Registration Member of FMDQ Exchange, was used to support the company’s short-term working capital and funding requirements.
