Why FBNQuest Encourages Commercial Paper Issue Growth in Nigeria

FBNQuest, the investment banking and asset management division of FBN Holdings PLC, has consistently shown its support for the expansion of commercial paper issuances in Nigeria by successfully completing a number of debt transactions for corporations.

The Nigerian Debt Capital Market in recent years has seen a resurgence in Commercial Papers (CP) issuances and a total of approximately N1 trillion in value of commercial papers was issued in 2020 alone.

FBNQuest has also played a pivotal role in reinitiating the Commercial Paper market for non-bank issuers leading seven institutions to establish Commercial Paper programmes in the past few years.

FBNQuest continues to rely on its deep sector expertise and structuring skills to execute and close the most complicated financings across all key sectors of the Nigerian economy. On record, it has arranged public commercial paper issuances worth up to N400 billion for large institutions.

The firm also introduced the use of a Liquidity Support Facility (LSF) structure for the UPDC Plc. Commercial Paper transaction, a feature which enhanced the instrument’s credit with a rating of ‘A-’, and was six notches higher than the Issuer’s rating on the merit of the LSF providers.

As a full-service investment bank, FBNQuest has played an essential role in several Commercial Paper deals for clients such as Dangote Cement Plc., MTN Nigeria Communications PLC, Nigerian Breweries PLC, Flour Mills of Nigeria PLC, Mixta Real Estate Plc., FBNQuest Merchant Bank Ltd, Valency Agro Nigeria Ltd, CardinalStone Ltd and Prima Corporation Ltd.

Patrick Mgbenwelu, Group Executive – Head Investment Banking and Operations, FBNQuest Merchant Bank, while speaking on the organisation’s support and active involvement in the growth of CP transactions, stated, ‘’Our aim is to consistently provide extraordinary value and bespoke solutions for our stakeholders and foster development in the Nigerian financial markets at large.

“This comes with in-depth expertise of our capital markets team, comprising of professionals with experience in finance spanning international and local markets, as well as robust understanding of the key sectors of the Nigerian economy. We will continue to strengthen and expand our expertise to demonstrate the most advanced and innovative, yet simple structures in the Debt Capital Markets industry”.

“We remain committed to delivering value-added investment banking solutions to corporates, sub nationals and the Federal Government, leveraging our strong distributions platform and proven track record for raising funds for capital expenditure and expansion projects across diverse industries and the public sector”, he added.