N3.44trn raised through bonds, commercial papers in two years — AIHN

Private companies and the government raised N3.44 trillion through Corporate Bonds and Commercial Paper issuance in two years, the Association of Issuing Houses of Nigeria (AIHN), announced yesterday.

AIHN President, Ike Chioke, disclosed this at the group’s Annual General Meeting (AGM) and presentation of 2022 annual report in Lagos.

Presenting the group’s financial position as at December 31, 2022, he said  its revenue increased by 31 percent over the past three years.

The group’s total assets stood at N416.14 million in 2022, higher than N361.05 million it recorded in 2021 financial year.

It also recorded total income of N85.41 million in 2022, higher than N64.78 million it achieved in 2021. Also, the group achieved income surplus of N53.98 million in 2022, higher than N36.33 million it posted in 2021 financial year.

Chioke said the growth underscores its commitment to fiscal responsibility and efficient management of resources.

He said that the investment banking segment of the market achieved these milestones in 2022, despite global and domestic macroeconomic headwinds. The sector sustained the momentum seen in 2021 as many economies continue to recover from the impact of COVID-19.

He said, “Capital raising activities in the local environment consolidated on the successes recorded in 2021. Notably, 333 deals valued at about N3.44 trillion have been recorded over the last two years in the local debt market. This largely reflects the activities of corporates in the bonds and commercial paper issuance space while also considering states sponsored instruments.”

Chioke said that in August 2022, Dangote Industries Limited successfully closed its Series 1, dual tranche, bond issue N187.59 billion under its N300 billion bond issuance programme. This was followed in December 2022 by the issuance of the Series 2 bond issuance of up to N112.42 billion. This is the largest corporate bond ever se in the Nigerian capital market.

“Also, MTN Nigeria Communications Plc established a N200 billion tore issuance programme under which it issued its N115Billion Series 1 Bond in September 2022. The transaction is the first bond issuance by a Nigerian telecommunications company.

“More recently, the Lagos State Government established a N1 trillion Debt and Hybrid Instruments Issuance Programme under which issued its Series 1 N115 Billion and Series 2 N19.82 billion bond issuances in May 2023. These transactions among many others further substantiate the increased confidence of companies and investors in our loca capital market,” he said.

In 2022, the weak growth outlook and tighter monetary policies impacted global debt levels and the fixed income space.

“Although debt level fell 2.2 percent year-on-year  to $296.6 trillion in fourth quarter of 2022, global public and private debt-to- Gross Domestic Product ratios remained well above pre-pandemic records.

“In the Bonds space, we witnessed unprecedentedly poor returns due to normalisation of policy rates, recession fears hurting credit spreads, and liquidity shocks driving up volatility,” he said.

Chioke said, “Seed and Series funding continue to report high deal volume as technology based start-ups intensify efforts to achieve business expansion.

“Hence, traditional investment banks must innovate to survive and win market share in the growing Seed and Series funding space. Attracting night talent in the investment banking sector is however becoming increasingly difficult owing to competition from the financial technology companies and the increased emigration wave,” he said.

To support future growth, he advised investment banks to be innovative and consider increasing participation in the technology revolution that is shaping sectors around the globe.

“This will create an opportunity for artificial intelligence to take on a greater role in assessing market opportunities and market data. These new technologies portend significant cost savings and delivery of innovative solutions for investment banks,” he said.

The AIHN also used the occasion of the AGM appointed Kemi Awodein as president, after Chioke’s two-year tenure elapsed.

Other Executive Council Members include Dr. Gabdebo Adenrele, Vice President; Alhassan Gwarzo, Secretary of Finance, and Onyebuchim Obiyemi, Secretary Administration.

In her acceptance speech, Awodein said she will do her best to justify the confidence reposed on her and other executive committee members by the group.

She said, “We will continue from where Ike Chioke dropped the baton. We will continue to make giant strides in the development of the market. I ask for your collective support for us to achieve our collective goal of lifting the market.”