One of Nigeria’s leading investment banks, Coronation Merchant Bank Limited, has seen over 180% subscription to its recently issued commercial paper; an impressive performance by every standard.
This is the investment bank’s first ever commercial paper issue, which comes under its ₦100 billion Commercial Paper Programme. For the first tranche of the programme, Coronation Merchant purposed to raise about ₦15 billion. Interestingly, the company has now raised over ₦28 billion, thanks to subscriptions by both high net-worth investors and institutions alike.
Details of the commercial paper
Coronation Merchant Bank issued its commercial paper under two series of 180-days and 270-days at the rates of 12.60% and 12.69% respectively. While the 180-day paper has a yield of 13.43%, the 270-day paper has a 14.00% yield.
This Day reports that industry experts have adjudged the issue as “unprecedented achievement in Nigeria’s Capital market”, especially in view of how tightly the instruments were priced.
Meanwhile, the company’s Chief Executive Officer, Abu Jimoh, while commenting on the development, said the successful result has helped his company achieve effective balance sheet management.
“we are pleased at the outcome of this exercise. The Commercial Paper issuance, which represents our very first in the market, has enabled us to achieve our objective of effective balance sheet management that is geared towards providing capital to various sectors of the economy.
“The positive results recorded by our commercial paper is a testament to the strength of the Bank’s credit in the capital markets. It is both gratifying and humbling to note this level of investor confidence in the Bank.” – Jimoh
Also commenting on the development is Abiodun Sanusi, who is the Head of Investment Banking at Coronation Merchant Bank. According to him, the bank has “differentiated itself as a formidable player in the capital market, having raised in excess of ₦300 billion for various companies in multiple sectors of the economy.” This they have accomplished in less than three years.
Coronation Merchant Bank Limited was recently established and positioned to fill a gap in Nigeria’s supposedly under-served market segment, while meeting the need for long-term capital across sectors of the economy.
Aside investment banking, Coronation Merchant also offers wealth management services, private banking, corporate banking, global markets and treasury services, etc. More so, it offers securities trading/brokerage, asset management and trustees services via its subsidiaries, Coronation Securities Limited and Coronation Asset Management Limited respectively.
The company, which is a subsidiary of WAPIC Insurance, also supports the public sector and other institutions, offering strategic and financial advice, capital market solutions and more.
The company is, however, in competition with a number of other merchant banks, including FBNQuest Merchant Bank and FSDH Merchant Bank Limited, etc.