NB raises N17.7bn in commercial paper programme

After establishing its 3-year 100 billion commercial paper (CP) programme, Nigerian Breweries (NB) plc has successfully raised N17.7 billion in the Series 1 issue, at a yield of 12.50 percent per annum. The offer, which closed on October 8, following strong institutional investor participation, demonstrates confidence in the NB story.

The brewer’s CP programme is a significant addition to the Nigerian capital market. The success of the maiden issuance represents the strong acceptance of the issue in the market, which is further evidenced by the diverse category of investors to whom the securities were distributed (including asset managers, insurance companies, trustees and banks).

Mark Rutten, finance director, NB, speaking at the signing ceremony, said the transaction provided the company the ability to periodically access alternative debt funding at rates mirroring money market and Treasury bill yields.

This also serves to help bring down overall funding costs, which complement the company’s other sources of working capital while diversifying its funding sources to include non-bank investors. “Our commercial paper issuances in the local markets will help to effectively manage and support the short-term funding requirements of the company,” he said.

The notes will be quoted on the FMDQ OTC platform to facilitate active secondary trading in the CPs, as it is a dedicated over-the-counter platform with an aim to promote liquidity of publicly issued securities.