…Providing Long-Awaited Corporate Benchmarks for Pricing and Valuation.
In a historic move, despite the economic downturn and realities of the COVID-19 pandemic, Dangote Cement PLC and MTN Nigeria Communications PLC have successfully tapped the market, raising the largest corporate bond and commercial papers, respectively, so far recorded in the Nigerian debt capital market.
Indeed, FMDQ Holdings PLC (FMDQ Group or FMDQ)’s wholly-owned subsidiary, FMDQ Securities Exchange Limited (FMDQ Exchange or the Exchange,) is privileged to have admitted for listing, the Dangote Cement PLC ₦100.00 billion Series 1 Bond (the Dangote Cement Bond) under its ₦300.00 billion Bond Programme, and for quotation, the MTN Nigeria Communications PLC ₦100.00 billion Series 1 & 2 Commercial Paper (CP) notes (the MTN Nigeria CPs) under its ₦100.00 billion CP Issuance Programme, both on the Exchange’s platform.
In the same vein, FMDQ, through its central securities depository, FMDQ Depository Limited (FMDQ Depository or the Depository), has also emerged the Depository of choice, having won the mandate as the sole depository for the lodgement of the MTN Nigeria CP notes, in addition to being a joint depository for the Dangote Cement Bond, providing the securities with the efficient value chain linkages which the FMDQ vertically integrated structure guarantees, as well as credible asset servicing and reliable data and information, amongst others.
The admission of these securities on FMDQ validates the innovative and credible capital market solutions championed and efficiently delivered by FMDQ, over the last few years. Furthermore, in line with its mandate to facilitate global competitiveness of the Nigerian financial market, FMDQ, through these admissions, has provided the market and its diverse stakeholders – local and international – the much-needed corporate benchmark for the bond and commercial paper markets.
These high-value issues will not only promote credible benchmark pricing and valuation in the DCM but will foster investor confidence in the potential of the Nigerian capital market even at such a time as now, in view of the COVID-19 crisis.
Indeed, the admission of these securities to FMDQ Depository has again delivered the power of choice to the investors on where to entrust their assets, validating the foresight of Lagos State Government in choosing FMDQ Depository for its bond earlier in the year.
Commenting on this milestone, the Chief Executive Officer of MTN Nigeria, Mr. Ferdinand Moolman, noted that the ₦100.00 billion MTN Nigeria CPs issued and quoted on FMDQ Securities Exchange represent the largest debut CP issuance by a Nigerian corporate.
According to him, “this issuance will allow MTN Nigeria to broaden its sources of funding; combining its established lines of credit with access to capital market funding, which will lower the Company’s overall cost of borrowing”.
As the sponsor of the MTN Nigeria CPs on FMDQ Securities Exchange, the Chief Executive Officer of Chapel Hill Denham, Mr. Bolaji Balogun, added that “Chapel Hill Denham is proud to have acted as Sole Arranger to MTN Nigeria on its debut ₦100.00 billion CP issuance and programme.
This landmark transaction for MTN Nigeria was many times oversubscribed and priced tightly, indicative of the issuer’s strong rating with investors. Chapel Hill Denham is pleased to have introduced an important new issuer into Nigeria’s debt market, attracting participation from a diverse orbit of the eligible individual and institutional investors”.
Speaking on this great achievement, the Chief Executive Officer of FMDQ Group, Mr. Bola Onadele. Koko expressed his delight on the admission of these securities to FMDQ Exchange and FMDQ Depository, and the wider implication for the market. According to him, “the market has been yearning for corporate benchmarks for pricing and valuation of securities in the debt capital market, and coming at a time when the resilience of the Nigerian financial market is being tested by the impact of the COVID-19 pandemic is even more commendable.
The success of these issuances by the premier and largest business conglomerate in Africa, Dangote Industries, through its subsidiary, Dangote Cement PLC, and the debut made into the Nigerian DCM by leading telecommunications giant, MTN Nigeria Communications PLC, lay credence to the untapped and great potential of the Nigerian capital market to support sustainable development in Nigeria, and the confidence of investors, as well as the commitment of FMDQ Group to empower the markets to deliver prosperity to Nigeria and Nigerians”.
With FMDQ Exchange providing an efficient and reliable platform for the registrations, listings, quotations, and trading of debt securities as well as reporting of data and information; FMDQ Clear Limited (FMDQ Clear) ensuring adequate risk management and facilitating settlement finality; and FMDQ Depository providing a robust and secure securities depository for the Nigerian capital market, FMDQ Group has continued to provide the Nigerian financial market a one-stop platform, enabled by data & information and technology, for market participants to begin and end their market transactions seamlessly and cost-efficiently.
FMDQ Group is Africa’s first vertically integrated financial market infrastructure group, providing execution, risk management, clearing, settlement and depository services, as well as data and information across the debt capital, foreign exchange, and derivatives markets through its subsidiaries – FMDQ Exchange, FMDQ Clear, FMDQ Depository and FMDQ Private Markets Limited.
FMDQ’s mandate remains to make the Nigerian financial market globally competitive, operationally excellent, liquid, and diverse, in line with its “GOLD” Agenda, providing the required support to governments, corporates, and individuals through its unrivalled and efficient platform for capital access, investment opportunities, value transfer and risk management.