United Capital Plc. has successfully raised the sum of N15billion in its recently issued Series 3 Commercial Paper.

United Capital Plc. has announced that it has successfully raised the sum of N15billion in its recently issued Series 3 Commercial Paper ("˜'CP'') under a N20billion programme registered with the FMDQ Securities Exchange.

This is according to a disclosure signed by the firm's Secretary, Leo Okafor, and sent to the Nigerian Stock Exchange market.

The recent corporate action is sequel to successfully raising the sum of N5.3 billion in April 2020, through a debut Series 1&2 Commercial Paper issuance.

What you should know

  • The Series 3 issuance with a maturity period of 270 days was issued at a yield of 1.26% and had a subscription of circa 112% with firm commitments from a pool of institutional investors, particularly Asset Managers.
  • This issuance set another ground breaking record in the Nigerian Capital Markets, being the lowest yield on record for a 270-day CP issuance by a nonbank issuer.
  • FSDH Capital Limited, United Capital Plc, and UCML Capital Limited, acted as arrangers to the transaction.
  • According to Investopedia, Commercial paper 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. In addition, Commercial paper is usually issued at a discount from face value and reflects prevailing market interest rates.

What they are saying

Commenting on the recent development, the Group Chief Executive Officer, Mr. Peter Ashade said: ...The commercial paper issuance is in line with our bid to diversify our funding sources, strengthen our capital base and intensify our strategic initiatives aimed at providing innovative financing solutions to our clients."

Source: Nairametrics