Fixed Income

Flour Mills Floats ₦29.89bn Fixed Rate Bonds on FMDQ Exchange Platform

Following the due diligence of its Board Listings and Markets Committee, FMDQ Securities Exchange Limited (FMDQ Exchange), has approved the listing of Flour Mills of Nigeria Plc’s ₦4.89bn Series 4 Tranche A and ₦25bn Series 4 Tranche B on its platform.

The Fixed Rate Bonds, coming shortly on the heels of the recent Commercial Paper (CP) issuances by Total Nigeria Plc, Valency Agro Nigeria Limited and Mixta Real Estate Plc, came under Flour Mills’ ₦70bn Bond Issuance Programme.

The global and Nigerian economic landscapes and business environments continue to suffer disruptions arising from the effects of the Coronavirus (COVID-19) pandemic, even as there are concerns over the prevailing and more virulent second wave. This situation is despite global vaccination efforts and restrictive guidelines put in place by governments and advisory bodies, and have seen corporates across multiple sectors re-evaluating their financing strategies, going into the new year.

Many are tapping the debt capital markets as a viable avenue to efficiently raise capital to meet their business expansion and working capital needs, in view of the critical role debt markets play in facilitating sustainable growth and development.

The Nigeria debt capital market (DCM) plays an important role in the efficient mobilisation and allocation of resources in the economy and despite the impact of the current times, the market continues to effectively support corporates seeking to expand their business operations.

This, the management of FMDQ Holdings Plc (FMDQ Group) says, it has continued to provide stakeholders in the Nigerian capital market with a credible and robust platform for capital access, risk management and transfer of value, in its capacity as a leading market organiser of the Nigerian DCM, amongst others.

A statement by FMDQ Group quoted Omoboyede Olusanya, Group Managing Director/Chief Executive, Flour Mills of Nigeria Plc, as expressing the company’s is delight at the successful conclusion of the issuance under its ₦70bn programme.

The bond, “which coincided with our 60th anniversary celebration was strongly supported by the institutional investor community and corroborates our strategic objective of sustaining our market leadership position whilst backwardly integrating to increase the use of locally sourced materials to develop and produce unique consumer products in alignment with our mission of “Feeding the Nation, Everyday”.

“The proceeds of both bonds have been used entirely to refinance our existing commercial paper notes also successfully issued during the pandemic,” he added.

Also commenting, Abimbola Kasim, Acting Managing Director, FCMB Capital Markets Limited, expressed appreciation for “the opportunity given to us by the board and management of Flour Mills of Nigeria to act as the Lead Issuing House.”

Being the final and largest Series under the ₦70bn bond issuance programme registered in 2018, he stressed that “the success of this transaction speaks to Flour Mills’ impressive operational and financial performance, and an affirmation of this strength by investors in the bond who subscribed overwhelmingly during a low interest rate environment.

“Following this success, we expect Flour Mills and our other clients to continue to explore opportunities to raise funds from the Nigerian debt capital markets to diversify their funding sources,” he added.

As the economic impact of COVID-19 continues to crystallise and business organisations strive to rise above the ‘murky waters’, FMDQ Group expressed readiness to contribute towards the emergence of a resilient financial market in the country.

As with previous bonds issued under the programme and with all other securities listed, quoted, and traded on the FMDQ Exchange platform, the Flour Mills bonds, the statement continued, “shall be availed total market visibility through FMDQ Exchange’s website and systems; transparency through their inclusion in the FMDQ Daily Quotations List; governance and continuous information disclosure to protect investor interest; amongst other benefits derived from the preferred admission to FMDQ Exchange.”

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