NOVA Merchant Bank offers N20bn commercial paper

NOVA Merchant Bank says it has opened an offering for the N20 billion Series 1 & 2 commercial paper (CP) issuance.

The CP is part of its N50 billion debt programme.

In a statement made available to TheCable, the bank said the offering, which opened on the FMDQ platform on Tuesday, February 8, 2022, has a tenor of 182 days and 270 days for Series 1 and Series 2, respectively.

The new offer follows the recent successful run of its first listing of N10 billion 7-year subordinated unsecured bond on the FMDQ platform in 2021, which saw an oversubscription by 300 percent.

Commercial papers are short-term debt securities typically issued by creditworthy corporations looking to raise funds from the public to meet working capital requirements as a viable alternative to bank credit.

In simple terms, companies borrow money from the public by issuing short-term promissory notes, usually unsecured, with the promise of repayment at the date of maturity.

Nath Ude, chief executive officer and managing director of NOVA Merchant Bank, explained that the N50 billion CP programme gives credence to the bank’s confidence in the Nigerian debt capital market.

“The successful listing of our N50billion CP Programme on the FMDQ platform further gives credence to NOVA Merchant Bank’s confidence in the Nigerian debt capital market and puts the Bank in a position to broaden potential funding sources and create superior value in the financial market it serves,” he said.

“We remain driven by our aspiration to transform the African financial services landscape with fresh thinking and innovative solutions.”

The bank also noted that the proceeds from this commercial paper would be used to fund short-term working capital requirements and for general corporate purposes.