Debt market size rises to N28.94 trn as six companies raise corporate bonds in six months

THE Financial Market Dealers Quote (FMDQ) Exchange says debt market size as at July 15, 2022, is N28.94 trillion.

The debt market, or bond market, is the arena in which investment in loans are bought and sold. There is no single physical exchange for bonds. Transactions are mostly made between brokers or large institutions, or by individual investors.

This is even as six Nigerian companies issued corporate bonds worth N246.28 billion in order to improve their balance sheet and scale up their operations during the half-year ended June 30, 2022.

The major deals consummated in the Nigerian corporate scenes during the period are: Dangote Cement, Sub-Saharan Africa’s largest cement producer which raised N116 billion in the largest corporate bond issuance in the history of the Nigerian capital market. It was followed by Shelter Afrique, the pan-African development finance institution, raised N46 billion ($110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in Nigeria’s capital market under its N200 billion ($481.3 million) bond issuance programme.

Presco Plc, during the period under review, also announced the issuance of N34.5 billion Series 17-year Fixed Rate bonds under its N50 billion bond issuance programme and FMDQ Securities Exchange Limited through its Board Listings and Markets Committee admitted the listing of the Ardova Plc N11.44 billion Tranche A and N13.86 billion Tranche B Series 1 Fixed Rate Bonds under its N60.00 billion Bond Issuance Programme on its platform.

In the same vein, Access Holdings PIc announced the successful closure of its $50 million (N20.98 billion) Reg S Step-Up Green Notes due 2027 in the international capital market. The company disclosed this in a statement made available on the website of the Nigerian Exchange Ltd (NGX).

FMDQ Securities Exchange Limited admitted for listing on its platform, the Eat & Go Finance SPV PLC N3.50 billion Series 2 Fixed Rate Bond under its N15.00 billion Bond Issuance Programme.

According to the company, Eat & Go Finance SPV Plc is a special purpose funding vehicle established by Eat ‘N’ Go Limited to raise finance from the debt capital market through the listing of debt securities.

Eat ‘N’ Go is a master franchisee for the Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Frozen Yoghurt brands with over a hundred stores established in nine states across Nigeria.

The proceeds generated from the Eat & Go SPV Plc Series 2 Bond, which is sponsored by Chapel Hill Denham Advisory Limited, a Registration Member (Listings) of the Exchange, would be used to fund reserve accounts and offset the costs of the company’s capital expenditure, amongst others.