5 Listed Firms Raise N108bn Commercial Paper To Boost Working Capital

Five Nigerian companies have successfully raised N108 billion through commercial paper issuances to bolster their working capital.

This move is part of a broader trend of companies leveraging short-term debt instruments to meet their liquidity needs and drive business growth.

FCMB’s recent commercial paper issuance, valued at N70 billion, was oversubscribed, reflecting investors’ confidence in the bank’s financial stability and growth prospects.

Zeenab Foods Limited raised N10.0 billion Series 4 Commercial Paper Notes under its N20 billion Commercial Paper Programme; while Coleman Technical Industries Limited raised N25 billion under its N100 billion Commercial Paper Programme. Cutix Plc is raising N3 billion CP with an offer to close on June 17, 2025.

Commercial Paper (CP) is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities on commercial paper typically last several days, and rarely range longer than 270 days.

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Nigerian businesses have continued to raise funds to finance their businesses through issuance of Commercial Papers (CPs) championed by FMDQ Securities Exchange Limited. This is as access to capital remains a top priority for corporates, as capital is required to meet short-term debt obligations such as working capital needs, funding expansion aspirations and existing debt obligations.

As part of its commitment to organise and facilitate credibility and transparency in the Nigerian debt capital market (DCM) space, FMDQ Exchange said, it shall continue to drive initiatives that are targeted at improving liquidity of securities listed and quoted on its platform, thereby supporting the aspirations of businesses.

The Exchange emphasised that it will remain unyielding in its support for the development of the Nigerian DCM through its highly efficient platform for the registration, listing, quotation and trading of securities, thereby providing access to capital.

The chief operating officer of InvestData Consulting Limited, Ambrose Omordion stated that the issuance of Commercial Papers (CPs) has become the trend in the Nigerian capital market used by companies to finance their operations.

He noted that, “when businesses require a cash injection to meet working capital requirements, they turn to commercial papers rather than borrowing from Nigerian commercial banks on a short-term basis. CPs are typically issued at a discount to face value, reflecting the prevailing market interest rates in the country.

“As a result, it is cheaper for companies to raise capital through the commercial paper markets than borrowing from commercial banks because bank lending comes with higher interest rates.”