Emmanuel OchayiDangote Cement, a major player in Africa’s cement industry, has commenced two new commercial paper series, Series 10 and 11, aiming to raise approximately N3.42 billion and N56.59 billion respectively.
This follows their successful fundraising through Series 8 and 9 in 2023, totaling N83.28 billion.
In tandem, Rand Merchant Bank has received approval for N25 billion Series 7 commercial papers under its N80 billion issuance program, as confirmed by the FMDQ Exchange.
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Commercial papers, typically short-term debt instruments, serve to address immediate financial requirements like payroll and accounts payable.
According to the Afrinvest Full Year Review, 2023 witnessed a surge in commercial paper issuance, rising from N670 billion in 2022 to N900 billion, with 140 issuances compared to 94 the previous year.
Findings show that the highest new listing value in March at N354.18 billion, followed by August at N239 billion. Conversely, October and June recorded the lowest values at N36.51 billion and N82.13 billion, respectively.
Attributing the spike in CP issuance, the FMDQ cited corporate institutions’ pursuit of alternative financing in the face of economic challenges. They aim to address capital shortfalls and sustain business operations by tapping into the debt capital market.
Speaking on the matter, a representative from the FMDQ emphasized, “To guarantee sustained business operations in the current challenging economic environment, corporate institutions have continued to explore alternative financing options by tapping the debt capital market to plug capital shortfalls.”
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