Firms raise N2.68trn from debt securities in two years

Over the past two years, Nigerian companies have turned to the debt securities market to raise an impressive N2.68 trillion through commercial papers and corporate bonds, according to findings by BusinessDay.

In 2023 alone, businesses secured approximately N1.63 trillion, with N126 billion sourced via long-term corporate bonds and a substantial N1.504 trillion through short-term commercial papers.

This trend was carried into 2024, as the market saw the issuance of N1.05 trillion in debt instruments. Notably, 45 companies raised N983.2 billion through commercial papers, while four companies issued corporate bonds valued at N69.4 billion, underscoring the continued reliance on fixed-income instruments for capital needs.

Within the two years, MTN Nigeria tapped the market the most, raising about N522.4 billion in 11 issuances. It was followed by Dangote Cement, which raised N340.68 billion during the period.

In this story, BusinessDay tracks some of the companies that have sourced the highest financing from the Nigerian capital markets scene.

1. MTN Nigeria – N522.36 billion

MTN Nigeria issued 11 commercial papers between 2023 and 2024, raising a total of approximately N522.36 billion. The most recent issuance, under the group’s N250 billion Commercial Paper Programme, saw the company secure N72.18 billion through Series 13 and 14. The yields offered by MTN during the period range from 10.41 percent in Series 4 to 29 percent in Series 14, underscoring the rapid shifts in Nigeria’s monetary environment in just two years.

Read also: FCMB Asset Management raises N10.4 billion in Nigeria’s first private debt fund issuance

2. Dangote Cement – N340.68 billion

Nigeria’s largest cement maker, Dangote Cement Plc made consistent appearances in the Nigerian capital market scene, raising about N340.68 billion in 13 issuances which occurred over both years. Dangote Cement is executing a N300 billion Commercial Paper Programme, with yields on the instruments ranging from 12.20 percent in Series 4, issued in February 2023, to 23.28 percent in Series 16, issued in August 2024.

The sharp increase in yields, as seen in the offerings by Dangote Cement and MTN Nigeria, underscores the mounting challenges faced by Nigerian businesses. The steep rise in interest rates has not only strained profit margins but also heightened the cost of capital, forcing companies to navigate a more constrained operating environment.

3. Flour Mills of Nigeria – N301.08 billion

Flour Mills of Nigeria has been a consistent participant in the fixed-income market since 2023, raising N46 billion through bond issuance in that year and a total of N255.08 billion through commercial paper issuances over the two-year period.

A review of FMN’s financial results as of September 2024, shows that commercial papers and bond issuances have been the major source of the group’s borrowings. As of September 30, 2024, the group had an obligation of N128.7 billion owed to CBN’s Real Sector Support Facility, however, owed about N313.9 billion worth of commercial papers and bonds.

4. Dangote Sugar Refinery – N141.8 billion

Dangote Sugar Refinery in 2024, raised about N141.8 billion in commercial papers in five issuances which are part of its N150 billion commercial paper programme. About N111.94 billion of this amount has been paid.

Since 2022, the different members of the Dangote Group have been a consistent participant in the capital markets, raising close to N800 billion from corporate bonds and commercial papers. Aliko Dangote, the promoter of the group has been quite vocal about the crippling effect of the high interest rates on manufacturing coys in the country.

5. Dufil Prima Foods – N99.51 billion

Dufil Prima Foods, makers of Indomie Noodles have also tapped the market consistently over the past two years, raising over N99 billion from 8 issuances as part of its N50 billion Commercial Paper Programme. Yields have ranged from 12.20 percent to 23.83 percent over the two years. The company has tapped the capital markets quite extensively, raising over N158 billion since 2016.