Friday, August 14, 2020

Corporates turn to commercial papers, shun loans, shares

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Big blue-chip companies are showing preference for commercial papers as against the conventional bank loans and shares sale to meet their funding needs.

Financial experts, who spoke on the drive for CP, said it provided cheap funds for the firms and removed the cumbersome process associated with other means of raising capital.

Some of the corporates that have turned to CP to raise funds include MTN Nigeria Communications Plc, which recently notified the Nigerian Stock Exchange of its successful issuance of N100bn series I & II notes CP programme.

In April, Flour Mills of Nigeria Plc announced the issuance of N30bn (13 and 14), under its N100bn CP programme which was registered with the FMDQ OTC Plc. In the same month, United Capital Plc confirmed that it successfully raised N5.3bn in a series one and two CP issuance, under its N20bn programme registered with the FMDQ Securities Exchange