First City Monument Bank Limited, the flagship company in the FCMB Group Plc, has suspended its planned capital raiser of about N30 billion in short-term debt capital through the issuance of commercial papers (CPs).

In a regulatory filing signed by its Company Secretary, Mrs Olufunmilayo Adedibu, FCMB yesterday said it was suspending the CP issuance due to recent price distortion in the market.

“This is as a result of the Nigerian Treasury Bills auction of Wednesday, December 9, 2020, which distorted price discovery,” FCMB stated.

FCMB had planned the N30 billion CP issuance under its N100 billion CP programme. The CP was arranged with a tenor of 260 days.

FCMB had indicated that the net proceeds from the suspended debt capital raising would have been used to support its short-term funding needs.

According to the group, the CP issuance would serve as an additional funding source for the bank.

Key extracts of the third quarter results for the period ended September 30, 2020 showed appreciable growth across key performance indicators. Gross earnings rose to N146.43 billion in third quarter 2020 as against N135.82 billion in third quarter 2019. Profit before tax rose from N12.80 billion to N15.85 billion. After taxes, net profit rose from N10.79 billion in third quarter 2019 to N13.90 billion in third quarter 2020.

Many companies have  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 Tuesday, September 08, 2020.

Nigeria’s most capitalised quoted company and Africa’s largest cement producer, Dangote Cement Plc had 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 used 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 respectively.