In accordance with knowledge from the FMDQ Group, 56 Nigerian firms raised N1.504 trillion by way of business papers in 2023, representing a whopping 499% improve from the N251 billion raised in 2022.
Based mostly on the info tracked by Nairametrics, MTN Nigeria Plc raised the best quantity, with N375 billion raised in 7 issuances, as a part of its N250.00 billion business paper issuance program.
They have been adopted by Dangote Cement which raised N221.28 billion in six issuances in 2023, as a part of its N300.00 billion business paper issuance program.
Different notable quantities raised by way of business papers in 2023 embody N150.97 billion raised by Flour Mills of Nigeria Plc by way of its N200.00 billion business paper issuance program and N116.49 billion raised by Nigerian Breweries Plc as a part of its N100.00 billion business paper issuance.
Finishing the record of the highest ten CP issuers for 2023 have been Sterling Financial institution with N47.86 billion raised, Dufil Prima Meals Plc with N47.19 billion, FSDH Service provider Financial institution with N46.08 billion, Julius Berger Nigeria with N30.00 billion, FBNQuest Service provider Financial institution with N29.42 billion, and Mixta Actual Property with N28.94 billion.
N110 billion was raised by way of company bonds
Outdoors of economic papers, some firms additionally utilized the company bonds route to lift funds.
In accordance with knowledge from FMDQ Group tracked by Nairametrics, N110.39 billion was raised by way of company bonds. Nonetheless, this considerably declined by 83.8% from the N679.61 billion raised within the FMDQ by way of company bonds in 2022.
Aradel Holdings raised N10.31 billion as a part of its N20.00 billion bond issuance program, and Lagos Free Zone Firm raised N17.70 billion as a part of its N61 billion bond issuance program.
FCMB Group raised N20.69 billion as a part of its N300 billion bond program, whereas Flour Mills of Nigeria raised N46 billion as a part of its N200.00 billion bond issuance program.
What it’s best to know
With the financial coverage fee at 18.75%, financial institution lending charges to firms have skyrocketed, hitting as high as 30%
Thus, there’s a basic opinion that firms have resorted to debt devices similar to business papers to lift funds, therefore the excessive quantity of CP issuances recorded in 2023.
Business papers, a staple within the monetary world, have emerged as a beacon for each debtors and traders searching for beneficial phrases and safety.
These debt devices, usually sporting rates of interest decrease than these provided by conventional banks, have turn out to be a most popular avenue for borrowing capital.
For instance, the CPs issued out by MTN Nigeria have been issued between 10.41% and 14.33%, nevertheless, the lending fee to ICT firms as of December 15, 2023, ranged between 28.50% and 32.00% in UBA, and 22.00% and 28.50% in Entry Financial institution.
