Dangote Cement has listed two series of commercial papers under its N300bn issuance programme on the FMDQ Exchange.

Through Series 10 and 11, Dangote Cement is looking to raise about N3.42bn and N56.59bn respectively.

Similarly, Rand Merchant Bank also received approval for the quotation of N25bn Series 7 commercial papers under its N80bn issuance programme, according to a notice by the exchange.

Dangote Cement raised funds via issuances under its N300bn commercial papers programme in 2023. The firm, which is one of Africa’s largest cement producers, issued series 8 and 9 of the CPs on July 17, 2023, with the amount being N32.95bn and N50.33bn respectively.

Commercial papers are usually short-term debt instruments issued by corporations. It is often used to finance short-term liabilities such as payroll, accounts payable, and inventories.

According to the Afrinvest Full Year Review and 2024 outlook, there was an uptick in commercial paper issuance in 2023, driven by high finance costs via bonds and banks.

In the year under review, the asset management firm said that the value of new issuance of CPs rose to N900bn from N670bn in 2022. Expectedly, the number of issuances also increased. It jumped to 140 from 94 in the preceding year. However, the average issue yield at year-end remained the same at 16.4 per cent.

The month with the highest value of new listing was March with N354.18bn worth of CPs listed, followed by August with N239bn. October with N36.51bn and June with N82.13bn worth of newly listed CPs were the months with the lowest values recorded.

The FMDQ pushing forward a reason for the increase in CP issuance said, “To guarantee sustained business operations in the current challenging economic environment, corporate institutions have continued to explore alternative financing options by tapping the debt capital market to plug capital shortfalls.”