Experts x-ray Nigeria’s debt market, resilience

Nigeria’s debt capital markets are proving resilient in a challenging environment. Confidence building over the last few years and strong market liquidity has resulted in noteworthy transactions from previously unrepresented sectors. However, there is still a lot of room for growth.

At the Fourth Annual Bonds, Loans and Sukuk programme, the country’s only credit market event featuring various issuers, investors, regulators and business leaders which was held recently in Lagos and sponsored by Rand Merchant Bank (RMB), the need for growth was topical.

For the event’s sponsor, RMB, it recognises the importance of associating with such programmes, not just within Nigeria, but in other parts of the world, to bring thought leaders together to debate the current state of the Debt Capital Markets.

Besides, the forum would proffer solutions that would catalyse development and deepen the markets, thereby leading to further sustainable growth.

The Deputy Chief Executive Officer and Head, Investment Banking, RMB Nigeria, Dalu Ajene, said that the nation’s Debt Capital Markets remains burgeoning as investors continue to show interest in many sectors like power, telecommunications and financial services.

“Nigeria’s debt capital markets proved resilient in a challenging environment over the past year as noteworthy transactions have contributed to the steady development of the Nigerian market”, he said.Ajene noted that RMB would continue to play an important role as an intermediary in the debt markets and as a facilitator of transactions by working closely with issuers, investors, as well as regulators.

Senior Transactor, DFG, RMB Nigeria, Ikechukwu Omeruah, said: “The opportunity to understand the requirements of prospective issuers and discerning whether it is optimal to access the markets to issue in local or foreign currency is important.

“In addition, understanding what the investors are looking for in terms of tenor and yield are also very essential factors,” he said.Omeruah said RMB ensures that it connects the investors with opportunities they want to look at, the type of deals they want to see and make sure there is a match in risk appetite and return expectations.

To demonstrate RMB’s active participation in the bonds market, it has concluded significant transactions during the course of the outgoing year.For example, RMB, acting as a joint bookrunner and initial mandated lead arranger and underwriter (alongside 5 other banks) concluded a $1.8 billion landmark debt financing package for IHS Towers Group.

The group also assisted Dangote Cement Plc in raising N50 billion via a dual series Commercial Paper (CP) issue in this month.The transaction involved the issuance of the Series 13 and 14 CPs, priced at 7.75 per cent and 8.5 per cent respectively under the company’s N150 billion CP programme.