First City Monument Bank Limited (FCMB) has suspended its planned capital raiser of about N30 billion in short-term debt capital through the issuance of commercial papers (CPs).
This was disclosed in a statement signed and issued by the Company Secretary, Olufunmilayo Adedibu.
In the statement, the FCMB stated that it suspended the CP issuance due to recent price distortion in the market.
According to the bank, “This is as a result of the Nigerian Treasury Bills auction of Wednesday, December 9, 2020, which distorted price discovery.”
Recall that the FCMB had planned the N30 billion CP issuance under its N100 billion CP programme. The CP was arranged with a tenor of 260 days.
FCMB had indicated that the net proceeds from the suspended debt capital raising would have been used to support its short-term funding needs.
Recently, the Union Bank of Nigeria (UBN) had floated a N20 billion short-term debt issuance aimed at strengthening the working capital of the commercial bank.
The UBN raised N20 billion through the issuance of 180-day and 268-day commercial paper (CP). The new issuance was issued under the bank’s N100 billion Commercial Paper (CP) Programme, which was launched in 2018.
The bank had issued its debut issuance of Series 1 and 2 through which it successfully raised N24.3 billion in January 2019.
The new issuance, Series 3 and 4 is targeted at institutional investors including pension and non-pension asset managers, as well as eligible high net-worth investors.