FSDH Merchant Bank establishes N30b commercial paper programme

Following the successful establishment of its N30billion commercial paper programme, FSDH Merchant Bank Limited has launched its debut commercial paper (CP) issuance to raise up to N15 billion in the Nigerian money market with the issue of N814.12 million series 1 90-day and N14.17 billion series 2 269-day CP.

The CP offers were open to investors on August 24th and subsequently closed on August 29 with subscription levels of over N17 billion.

The Bank elected to allot N14.98 billion to investors across both series, in line with its initial target amount.

The Managing Director of the bank, Rilwan Belo-Osagie explained that the CP programme would afford it periodic access to the money market for short term funding as and when required.

The funds raised from the concluded series 1 and 2 issuance, according to him, would be applied by the bank for its general banking asset and liability management purposes including replacement of maturing wholesale liabilities.

He noted that the FSDH CP Programme is the first ever to be established by a Merchant Bank in Nigeria under the new guidelines on commercial paper from the Central Bank of Nigeria, published in 2009.

“There was strong retail and institutional investor (including pension funds, asset managers, insurance companies, trustees and high net worth individuals) participation in the offer. This demonstrates confidence in the FSDH brand as evidenced by the acceptance of the issues in the market by the diverse categories of investors to whom the securities were distributed.”
Speaking at the signing ceremony that was held at FSDH’s head office in Lagos, Belo-Osagie said: “We are very pleased with the establishment of this Commercial Paper programme for FSDH and the dedication and support of the advisors in making this a success.

“FSDH was very active in the commercial paper market prior to 2009 and the establishment of this CP programme serves as an opportunity for the Bank to restate its presence and significance in the money market and participate in the development and deepening of commercial paper market under the new regulations.”

He added that the notes would be quoted on the FMDQ OTC platform to facilitate active secondary trading of the CPs.

Lead arrangers on the transaction include FSDH Merchant Bank Limited (via its investment banking unit), Stanbic IBTC Capital Limited (a member of Standard Bank Group) and United Capital Limited. FSDH Merchant Bank Limited is acting as the Issuing, Calculation and Paying Agent.

FSDH Merchant Bank Limited, formerly First Securities Discount House Limited, was one of the first merchant banks to be awarded a merchant-banking license in Nigeria following the repeal of Universal Banking in 2010. The bank was incorporated in 1992 as First Securities Discount House Limited.