By Ademola Alawiye

Wednesday, 15 Dec 2010

Issuance of more corporate bonds by quoted companies will help in deepen the depth of the Nigerian capital market, the Group Managing Director of United Bank for Africa, Mr. Philips Oduoza, has said.

Oduoza said this at an interactive session with the Group Managing Director, Flour Mills of Nigeria Plc, Dr. Emmanuel Ukpabi, during a visit on Monday in Lagos.

According to a statement issued by the bank on Tuesday, the N37.5bn bond issued by Flour Mills was the largest corporate bond ever raised in Nigeria, coming on the heels of the successful raising of N20bn by UBA from the capital market recently and it will help in deepening the Nigerian bond market.

Oduoza said, ”We are immensely proud to have played a major role in bringing the N37.5bn Series 1 fixed rate senior unsecured bond issue transaction of Flour Mills to the market. The size of the transaction, the tight pricing level of 12 per cent, as well as the fact that it was oversubscribed demonstrates the confidence of investors in our capability as the issuer.”

He congratulated Flour Mills Nigeria for the successful bond raising, considering the economic challenges in the country, adding that it indicated the confidence the Nigerian financial institutions had in the company.

The statement said that a total of N49.8bn bids were raised from a varied composition of investors during the issue. Flour Mills had targeted an initial issue of N35bn, but it accepted bids up to 12 per cent, for a total amount of N37.5bn.

In his remarks, Ukpabi, said, ”We at Flour Mills are extremely pleased with the outcome of this transaction, and the benefits it provides to the Flour Mills Group’s expansion plans. We take this opportunity to express our appreciation also for the fantastic job done by our advisors- UBA Plc, Guaranty Trust Bank Plc and Zenith Capital Limited, in putting the transaction together.”

Speaking on the reason for issuing the bond, Ukpabi explained that Flour Mills had planned modernisation and expansion projects, hence the need to raise capital at an attractive interest rate.

 

Source: Punch