Crownrise floats N1 billion bond, as CBN woos investors to corporate bonds
Crownrise Finance Plc has said plans are underway to float a N1 billion bond this month through an Issuing House- Tiddo Securities.The bond issue is aimed at supporting Small and Medium Enterprises (SMEs), while prospective investors considering fixed-income securities have been enjoined to patronise corporate bonds, which have been described as the last safe investment.
Indeed, as the yields of many variable-income securities declined after the financial crisis, the interest rates paid by corporate bonds made them more appealing.
The Director, Other Financial Institutions Supervision Department (OFISD), Central Bank of Nigeria (CBN), Mrs. Olatokunbo Martins, at the stakeholders’ luncheon and introduction of the N1 billion investment note by Crownrise Finance to prospective investors in Lagos, wooed investors to corporate bonds.Martins said one major attraction of corporate bond is its strong returns, which is generally higher than those of government bonds.
According to her, many corporate bonds trade in the secondary market, which permits investors to buy and sell these securities after they have been issued. By doing so, she said investors can potentially benefit from selling bonds that have risen in price, or buying bonds after a price decline.
She noted that one major risk of corporate bond is the credit risk, saying for a company that commenced operations since 1991 with the mandate to deliver quality financial services to individuals and corporate bodies in the SMEs segment and has remained in operations despite all odds, it is expected that the raising of this fund would assist the company reposition itself in delivering of its mandates.
According to her, it is expected that the proceeds from the proposed bond issue by Crownrise Finance would be judiciously applied by the management of the company to boost the SMEs subsector and the economy in general.She assured that the regulator would continue to provide a level playing grounds for all institutions in the sub-sector towards the realisation of their individual business objectives and goals, while ensuring the enhancement of the safety and soundness of the Nigeria financial system.
The Managing Director/Chief Executive Officer, Crownrise Finance, Babatunde Rufai-Lariba, said it is the company’s belief that the importance of finance house business is a critical requirement for supporting small and medium enterprises, which are the engine of economic growth.He said the company sees huge opportunities in the Nigerian economy, which require the critical services of finance houses for activation and realisation.
“As a firm believer in the mission and importance of the sub-sector, we have decided to rise to the occasion, by mobilising the required resources that will enable us support economic players committed to tapping the opportunities in the Nigerian economy for business growth, employment generation and prosperity for individuals and families.”
This he said informed its decision to approach the investment public, particularly its stakeholders, to raise N1 billion through its bond offer, which would be floated this month.“Through the offer, we are inviting you to join us in our quest to provide the much needed financial support to the millions of individuals and businesses pushing to explore the huge opportunities offered by the nation’s economy.“Our commitment to integrity and doing business in the most ethical manner has not changed,” he said.