SEC: Companies may raise all-time high N200bn from debt sales in 2018

The Securities Exchange Commission (SEC) says companies may raise as much as N200 billion from the sale of debt instruments in 2018.

If actualized, this would be the highest ever in the country’s history.

According to SEC, five companies have already submitted plans for debt sales totaling N60.5 billion.

It said improved liquidity on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange is encouraging firms sell more debt securities.

Data made available by the commission shows that companies raised N23 billion in 2017 and N103 billion in 2016.

The 2017 figure is largely owed to the large issuances by the federal government although some states also issued some debt instruments.

The federal government issued its largest serving ever of the Eurobond in 2017; it also issued the Sukuk, green bond and savings bonds.

These funds were earmarked for infrastructural projects and funding budget deficit.

Commenting on the intentions of companies, Abubakar Jimoh, chief executive officer of Coronation Merchant Bank, said bank loans may not be enough to “substantially” finance businesses.

“Owing to the recent strong liquidity in the market, largely driven by the reduction in domestic borrowing and the consequent downward trend in rates, we expect to see an increase in corporate bond issuance in 2018,” he told Bloomberg in an interview.

He said the bank is planning to issue the first tranche of a N100 billion debt program in 2018 adding that at least four of his peers are going to take similar steps to increase their lending capacity.