NB establishes N100 billion commercial paper programme

Following the Central Bank of Nigeria’s guidelines on commercial paper issuance in Nigeria, Nigerian Breweries (NB) Plc, yesterday, established a N100 billion Commercial Paper (“CP”) Programme.

This represents the largest commercial paper programme to be established in Nigeria by a (non-financial institution) corporate issuer since the 2009 guidelines on commercial paper from the CBN.

According to the company, the launch of the inaugural commercial paper issue under the programme would kick off on or before Thursday, October 8.

Commenting on the significant of the exercise, the Finance Director of the company, Mark Rutten explained that the achievement is expected to complement the firm’s ‘other sources’ of working capital, while diversifying its funding sources to include non-bank investors.

He added that the exercise would enhance the company’s access to funding, even at rates equivalent to money market and treasury bills yields.
“Additionally, this programme would improve our ability to periodically access funding at rates mirroring money market and Treasury bill yields, would provide Nigerian Breweries with additional tools to help manage and optimize its overall funding cost.”

Speaking at the signing ceremony, the Managing Director of NB, Nicolaas Vervelde, explained that the transaction underscores the company’s continued commitment to winning with Nigeria, adding that this represents the largest ever commercial paper programme to be established by a (non-financial institution) corporate issuer following the 2009 guidelines on commercial paper from the Central Bank of Nigeria.
“In that regard, this effort clearly demonstrates our leadership status in the industry and an innovative approach towards executing company’s financing strategy, in an increasingly competitive market environment.”

The signing ceremony to mark the establishment of the programme was held at the company’s head office in Lagos, witnessed by Stanbic IBTC Capital Limited and FBN Capital Limited the representatives of the transaction advisors, Banwo & Ighodalo as Legal Counsel, KPMG as Auditors to the Issuer (for the relevant financial years under review), and Stanbic IBTC Bank PLC as issuing calculation and paying agent. Also in attendance were officials of the FMDQ OTC Plc.

Meanwhile, the company has been assigned a top-notch investment grade rating of “Aa” by Agusto & Co. Limited.
“As highlighted by Agusto & Co, the rating was assigned by representative of a company that possesses very strong financial condition and very strong capacity to meet its obligations as and when due, which clearly speaks to the corporate credentials and financial pedigree of Nigerian Breweries.”