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FMDQ admits UPDC’s N16.7 billion CP on platform

By Helen Oji
10 August 2016   |   1:35 am
FMDQ OTC Securities Exchange has admitted UACN Property Development Company (UPDC) Plc’s N16,799,893,000.00 Commercial Paper (CP) on its platform.
FMDQ OTC Securities Exchange

FMDQ OTC Securities Exchange

Issuer records N67.9% over subscription on transaction

FMDQ OTC Securities Exchange has admitted UACN Property Development Company (UPDC) Plc’s N16,799,893,000.00 Commercial Paper (CP) on its platform.

This CP represents series one under the organisation’s ₦24,000,000,000.00 CP Issuance Programme. In commemoration of this quotation, a quotation ceremony was held at the FMDQ offices to formally welcome the CP on the Exchange.

The transaction, which was part of UPDC’s N24 billion listed commercial papers programme, was oversubscribed by 67.9%, amounting to N6.79 billion over the sum of N10 billion initially targeted by the issuer – UPDC.

Ahead of the signing of the FMDQ CP quotations register and the presentation of the FMDQ CP Quotations Certificate, held in Lagos on Monday, the Managing Director of the company, Hakeem Ogunniran explained that the CP issuance had afforded UPDC a better opportunity to successfully diversify its short-term funding sources at a 25 per cent reduced cost, thereby enhancing their value-creating capability for UPDC’s various stakeholders.

According to him, the capital raising has enabled the company to increase its visibility in the market and optimize portfolio by diversifying into both retail and developmental mix.

“We a launching a confort zone, we have done a lot of reforms around mortgages and we are repositioning to attend to both the supply and demand end of that segment. If you are a forward looking company, you have to look for market dynamics of the market, you have to know the appropriate time to key into the environment and we looked at the situation and saw that at this particular time, it was imperative for us to explore the opportunity in the market.

“We have raised N16.7 billion which is series one of the cp programme and if you look at the interest rate, it is less than 11 per cent, so in the market where bank interest rate go as high as 20 percent, you can just imagine the level of savings that we will make over a six months period and if we issue the series, might be slightly at a higher interest rate but again, we will be able to maximize the funding of our project and basically, that is what we are trying to do.

“The market has supported the programme. And we have raised the 16.7 billion at 10.43 percent, which is good for us. What you do with a cp programme is to refinance the existing medium to long-term obligations. if you have expensive lines on your hand, cp programme helps you in a short term to refinance and help you to save two, three, four hundred basis points on your interest rate and that is what we have done, “ he added.

In his remark, the Managing Director of, FMDQ Plc Bola Onadele noted that the quotation of the real sector CP was evidence of the progress made in the Nigerian CP market to instill confidence in the nation’s financial market.

He stated that FMDQ, as the market organizer was poised to building a sustainable CP market in the financial market space and promote credibility for quoted CPs through a highly efficient registration process.

He added that the platform would also provide invaluable information, institute financial market infrastructures in line with global standards.

“As a securities exchange committed, as one of its mandates, to powering the growth of the Nigerian housing sector through the debt capital market, FMDQ is continually innovating and engaging key stakeholders towards promoting an efficient, transparent and well-regulated market, which will attract and retain domestic and foreign investors.”

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