• Sunday, February 25, 2024
businessday logo


FCMB: Leveraging on FMDQ for N26bn bond liquidity


Recently, First City Monument Bank (FCMB) Limited listed its N26 billion Series 1, 7-Year 14.25 percent Fixed Rate Unsecured Bond on the Over-The-Counter (OTC) platform of FMDQ plc.

The bond, which is due in the year 2021, is under a N100 billion-debt issuance programme. FCMB Capital Markets Limited, the investment-banking subsidiary of FCMB Group plc acted as the issuing house and sponsor of the bond.

The bank said proceeds of the bond would be used in strengthening its capital base, enhancing its capital adequacy ratio, expanding its distribution channels and infrastructure as well as growing its risk assets with a view to enhancing income.

Ladi Balogun, group managing director/chief executive of FCMB Limited had said at the listing ceremony that, “The significance of listing the FCMB bond on the FMDQ platform is hinged on the availability of a readily accessible liquid market to the bondholders, where the value of their investments can easily be determined and monitored on a daily basis. It also provides a platform to realise their investment when necessary. The bond provides a long term capital that will help us to reinforce our commitment to our customers.”

Balogun who commended FMDQ plc efforts towards creating more depth in the Nigerian debt market, also applauded them for the platform’s seamless processes and drive to achieve market transparency by deploying technology driven initiatives.

Tolu Osinibi, executive director, FCMB Capital Markets Limited, said: “In a relatively short space of time, FMDQ is clearly demonstrating significant value-add in improving the dynamism, efficiency and sophistication of Nigeria’s growing fixed income market.

“The contribution of the FMDQ platform to improving market information, liquidity and transparency is already proven; these are critical success factors to the growth of Nigeria’s capital market.”

He said that, “as a registered member of FMDQ plc, FCMB Capital Markets is proud to be part of this journey. We will continue to actively encourage its issuer clients to list their fixed income securities on the FMDQ platform and be part of this market transforming initiative.”

The issuing house explained that the decision to list the bond on the platform of FMDQ was to enable bondholders access to a liquid market, where the value of their investments can easily be determined and monitored on a daily basis, as well as provide an opportunity for them to realise their investment when necessary.

Tumi Sekoni, group head, Business Development at FMDQ said, “FMDQ, recognising the growth potential of issuers of debt in the Nigerian capital market, affords a remarkable opportunity for the issuers to raise the profile of their issues and access a deep pool of funds.”

According to her, “listing of debt securities on the OTC securities exchange provides a wide range of benefits across the debt market value chain, among which are global visibility, transparency, improved secondary market liquidity, price formation and benchmark pricing.”

The Securities and Exchange Commission (SEC), in December 2014, approved the FMDQ bond listing and quotation rules as part of the initiatives to promote secondary market liquidity and contribute to the growth of the domestic bond market.

As a debt-focused securities exchange with a commitment to facilitate growth and development in the financial market through its platform for the registration, listing, quotation and valuation of bonds, FMDQ has continued to promote an efficient, transparent and well regulated market, which will attract and retain both domestic and foreign investors.

The highlight of the FCMB bond listing ceremony was the unveiling of the FMDQ Bond Listing Scroll, the presentation of the FMDQ Bond Listing Plaque and autographing of the FMDQ Bond Listing Wall of Fame.