FMDQ OTC Securities Exchange on Thursday recorded another milestone with the quotation of Nigerian Breweries (NB) Plc N17.7 billion commercial paper (CP) on its platform.
The N17.7 billion NB CP at 12.16 per cent was the first non-financial institution CP to be quoted on the FMDQ trading platform.
CP is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities.
Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.
Speaking at the quotation ceremony in Lagos, Ms Tumi Sekoni, FMDQ Group Head, Business Development, commended the company for deepening the country’s debt capital market.
Sekoni said that the company had set pace for other companies to come and raise money from the market.
Mr Bola Onadele, FMDQ Managing Director, also said that the quotation would deepen the nation’s capital market.
Onadele said that “FMDQ provides a platform for the registration, listing, quotation and trading of bonds and other fixed income securities.”
He said that the company had empowered the Nigerian debt market with price discovery, transparency and market integrity through market development initiatives.
Onadele said that listing and quotation on FMDQ provided a host of benefits across the debt market value chain, positively impacting on stakeholders in the Debt Capital Market (DCM).
“FMDQ’s value-add to DCM includes visibility and transparency to the listed/quoted debts, improved secondary market liquidity, benchmark pricing and price formation,’’ he said.
The managing director said that FMDQ had made the nation’s capital market globally competitive with continuous disclosure of relevant information on fixed income issues listed on its platform.
Mr Mark Rutten, Nigerian Breweries Chief Financial Officer, said that the company was pleased to contribute to the deepening of the Nigerian debt capital market.
Rutten, who commended FMDQ for hosting the quotation, said that it was a memorable day for both companies.
He said the company would continue to support the growth and development of the debt market.
“We are pleased with the first series, this is just the beginning, there are more to come,’’ Rutten said.
He said the company decided to quote on the securities exchange to facilitate active secondary market, promote liquidity and aid the growth of the domestic capital market.
He said that the company was excited with the CP programme because of its enhanced benefits.
“I call on other chief financial officers and managing directors of companies listed on the stock exchange to emulate NB and embrace FMDQ ,’’ Rutten said.
He also commended the lead arrangers, Stanbic IBTC Capital and FBN Capital for advising the company to embark on the transaction.
The chief financial officer said that the company would continue with its innovation to ensure enhanced value creation to all stakeholders.
He said that the company was looking toward ensuring that 60 per cent of its raw materials were sourced locally by 2018.
FMDQ, a securities exchange and self-regulatory organisation registered by the Securities and Exchange Commission (SEC), provides a platform for listing, quoting and trading of fixed income and currency products.