Skye Bank issues N100 billion Commercial Paper
NIGERIA’S next mega bank, Skye Bank has today signed an agreement with StanbicIBTC Bank and Financial Market Dealers Quotation System (FMDQ) to issue N100billion in commercial paper to increase its ability to do more transactions.
The first tranche of the transaction is in the size of N20b, which opens on March 23rd and closes on March 27th, 2015.
Speaking to newsmen on the transaction, Skye Bank GMD/CEO, Timothy Oguntayo, says Skye Bank is taking advantage of the Commercial Paper window to expand the number of instruments on its Balance Sheet.
According to him, the bank is driven “to take advantage of this programme to increase awareness of the availability of this innovative product in the market place and to help them acquire investments that are tradable without suffering penalty”.
Skye Bank is only the second Bank to take advantage of the Central Bank of Nigeria (CBN) and FMDQ reintroduction of the Commercial Paper window since 2009; the transaction represents only the third since then.
For a bank to qualify to issue Commercial Paper, the bank must be liquid, have a favourable credit rating of not less than B- and must have record assuring investors of their ability to perform, according to Nosakhare Aguebor, an Associate at G. Elias and Co.
Skye Bank has investment Grade ratings from GCR, Standard and Poors, and Agusto &Co.; A- By Global Credit rating; ‘BBB’ by S&P and ‘Bbb’ by Agusto and Co.
Earlier Yewande Sadiku, CEO, StanbicIBTC Capital, had described the deal as a milestone in the history of market innovation in the country after thanking Skye bank for the opportunity to be involved in the landmark deal.
Skye Bank is making the issue on the back of its strong brand and reputation; experienced and stable management team; good ratings; strong subsidiaries and presence in West Africa; and sound use of proceeds according to a summary document on the of Issuance programme.
The Issue which has StanbicIBTC as agents and adviser has a 90-Day tenor benchmarked against the 91-Day Treasury bill. Minimum subscription to the offer is N5, 000,000 and in multiples of N1, 000 and notes may be rediscounted at market price at investors’ option and subject to one week notice.
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