FMDQ deepens debt market with N200b MTN’s, Dangote’s issues

By Taofik Salako, Deputy Group Business Editor

FMDQ Securities Exchange has further deepened the secondary debt market with the admission of the historic debt issues by Nigeria’s leading corporates, MTN Nigeria Communications Plc and Dangote Cement Plc for trading on its platform.

Dangote Cement listed its N100 billion debut bond, the largest single debut corporate bond in the  capital market while MTN Nigeria listed its N100 billion debut commercial paper (CP), the largest debut issuance by any Nigerian company.

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MTN Nigeria, which had planned initially to raise N50 billion under its registered N100 billion CP programme recorded impressive oversubscription of 400 per cent and thus decided to increase the offer size to the maximum limit of N100 billion.

MTN Nigeria raised N20 billion under its series One 180-day CP at an effective yield of 4.90 per cent. The telecoms company raised N80 billion under its series Two 270-day CP at effective yield of 5.95 per cent.

Dangote Cement’s maiden bond issue was fully subscribed, the first series under the company’s N300 billion shelf bond issuance programme.

A total of 100 million units of N1,000 par value of the Dangote Cement’s N100 billion Series One five-year Fixed Rate Senior Unsecured Bonds were admitted.

While the bond would be redeemed at the end of its five-year tenor, it would pay fixed coupon twice yearly. The applicable coupon rate was 12.50 per cent.

Also, FMDQ Depository Limited, the central depository of the FMDQ Group, also won the mandate as the sole depository for the lodgement of the MTN Nigeria CP notes, in addition to being a joint depository for the Dangote Cement bond.

This provides securities with the efficient value chain linkages, which the FMDQ vertically integrated structure guarantees, as well as credible asset servicing and reliable data and information, amongst others.

Chief Executive Officer, MTN Nigeria Communications Plc, Mr. Ferdinand Moolman, said the N100 billion CP would allow MTN Nigeria to broaden its sources of funding; combining its established lines of credit with access to capital market funding, which will lower the company’s cost of borrowing.

Chief Executive Officer, Chapel Hill Denham, Mr. Bolaji Balogun, the sponsor of MTN Nigeria CPs on FMDQ Securities Exchange, said the landmark transaction for MTN Nigeria was many times over-subscribed and priced tightly, indicating the company’s strong rating with investors.

According to him, Chapel Hill Denham is pleased to have introduced an important new issuer into the country’s debt market, attracting participation from a diverse orbit of individual and institutional investors.

Chief Executive Officer, FMDQ Group, Mr. Bola Onadele-Koko expressed delight on the admission of the securities to FMDQ Exchange and FMDQ Depository noting that the admission has wider implications for the debt market.

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According to him, the market has been yearning for corporate benchmarks for pricing and valuation of securities in the debt capital market, and coming at a time when the resilience of the Nigerian financial market is being tested by the impact of the COVID-19 pandemic is even more commendable.

“The success of these issuances by the premier and largest business conglomerate in Africa, Dangote Industries, through its subsidiary, Dangote Cement Plc, and the debut made into the Nigerian debt capital market by leading telecommunications giant, MTN Nigeria Communications Plc, lay credence to the untapped and great potential of the capital market to support sustainable development in Nigeria, and the confidence of investors, as well as the commitment of FMDQ Group to empower the markets to deliver prosperity to Nigeria and Nigerians,” Onadele-Koko said.

He noted that the admission of these securities on FMDQ validates the innovative and credible capital market solutions championed and efficiently delivered by FMDQ, over the last few years.

He added that in line with its mandate to facilitate global competitiveness of the financial market, FMDQ, through these admissions, has provided the market and its diverse stakeholders – local and international – the much-needed corporate benchmark for the bond and commercial paper markets.

“These high-value issues will not only promote credible benchmark pricing and valuation in the debt capital market, but will foster investor confidence in the potential of the Nigerian capital market even at such a time as now, in view of the COVID-19 crisis.

Indeed, the admission of these securities to FMDQ Depository, has again delivered power of choice to the investors on where to entrust their assets, validating the foresight of Lagos State Government in choosing FMDQ Depository for its bond earlier in the year,” Onadele.Koko said.

According to him, with FMDQ Exchange providing an efficient and reliable platform for the registrations, listings, quotations, and trading of debt securities as well as reporting of data and information; FMDQ Clear Limited ensuring adequate risk management and facilitating settlement finality; and FMDQ Depository providing a robust and secure securities depository for the Nigerian capital market, FMDQ Group has continued to provide the Nigerian financial market a one-stop platform, enabled by data and information and technology, for market participants to begin and end their market transactions seamlessly and cost-efficiently.

He described FMDQ Group as Africa’s first vertically integrated financial market infrastructure group, providing execution, risk management, clearing, settlement and depository services, as well as data and information across the debt capital, foreign exchange, and derivatives markets through its subsidiaries – FMDQ Exchange, FMDQ Clear, FMDQ Depository and FMDQ Private Markets Limited.

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According to him, FMDQ’s mandate remains to make the Nigerian financial market globally competitive, operationally excellent, liquid, and diverse, in line with its GOLD Agenda, providing the required support to governments, corporates, and individuals through its unrivalled and efficient platform for capital access, investment opportunities, value transfer and risk management.

Source: The Nation Online Nigeria

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