FMDQ lists N64.97bn Flour Mills’ Commercial Papers

FMDQ Securities Exchange Limited said it has listed for trading, the N64.97 billion Commercial Papers (CP) of Flour Mills of Nigeria Plc under its N200.00 billion CP Issuance Programme on the Exchange’s platform to raise short-term funds.

A commercial paper is a corporate bond issued by companies and organisations to raise much-needed funds.

The Exchange stated on Wednesday that the debt security comprising N13.33 billion Series 1 and N51.64 billion Series 2 Commercial Papers was listed on March 13, 2023.

The issuance has a tenor of three years with rates ranging between 13.75 per cent and 14.25 per cent for the offer which opened on April 4, 2023, and closes on April 14, 2023, with a minimum of N10 million to subscribe.

Repayment of the principal will be made semi-annually in arrears after the one-year moratorium period by the issuer who has a good credit rating of A and A- from Datapro and Agusto & Co, suggesting a good financial capacity. The issuance allows portfolio diversification with yields higher than the 3-year secured bond of 12.03 per cent.

The FMDQ indicated that the Nigerian food and the agro-allied company will utilize the proceeds to support its short-term funding requirements.

The publicly traded company with an integrated supply chain of food, agro-allied, logistics, and support services businesses is involved in the production of a wide range of food products, including flour, pasta, noodles, and ball foods.

FBNQuest Merchant Bank Limited was the Lead Sponsor while Chapel Hill Denham Advisory Limited, FCMB Capital Markets Limited, and United Capital Plc were Co-Sponsors of the transaction.

Speaking on the successful issuance of the CPs, Flour Mills Group, Chief Financial Officer, Anders Kristiansson, stated that the joint quotation was aimed at harnessing alternative funding sources to meet some of the company’s working and other capital requirements as management sought to deepen strategic, growth-consolidating investments across all value chains and in enabling capabilities that would unlock greater value for our stakeholders.

The Nigerian CP market has remained a viable funding option for corporate entities seeking to finance their short-term expenditures, including working capital shortfalls.

Only last week Wednesday, March 29, FMDQ also announced the listing of the Dangote Industries Funding Plc’s N187.58 billion Series 1 (Tranche A & B) and M112.42 billion Series 2 Senior Unsecured Bonds under its N300.00 billion Debt Issuance Programme on its platform.

According to the Exchange, the Series 1 and 2 bonds were listed on FMDQ Exchange in November 2022 and March 2023, respectively.

Dangote Industries Funding Plc is a special-purpose vehicle set up by Dangote Industries Limited to raise finance through the listing of debt securities. Dangote Industries is a diversified and fully integrated conglomerate with an annual group turnover of over $4 billion with vibrant operations in Nigeria and Africa across a wide range of sectors including cement, sugar, salt, condiments, packaging, energy, port operations, fertiliser, and petrochemicals.

In support of its mandate to deepen the Nigerian financial markets, FMDQ Exchange will continue to support the efficient allocation of capital by providing a credible platform for capital formation and effective intermediation towards fostering economic growth and development.