DLM Capital Group, a leading Development Investment Bank, has successfully executed the first scheduled principal and coupon payment to investors under its Sovereign Bond-Backed Composite Notes (SBCNs), marking a key performance milestone for the programme and reinforcing investor confidence in the structure.
The payment, delivered in line with the transaction’s expected cashflow profile, provides early validation of the robustness, credit integrity, and cashflow reliability of the SBCN structure.
Issued by DLM Funding SPV Plc under its ₦30.00 billion Medium-Term Notes Programme, the Series 1 issuance comprises, ₦7.30 billion Tranche A Notes offering a 40.62% Hold-to-Maturity return; and ₦1.70 billion Tranche B Notes offering a 19.07% return
The Notes were subsequently listed on FMDQ Exchange, with the Tranche A instrument now representing the most valuable AAA-rated corporate bond in the Nigerian capital markets.
The SBCN structure, developed by Dr. Sonnie Babatunde Ayere, group chief executive officer of DLM Capital Group, introduces a differentiated fixed income product that combines sovereign bond collateralisation with structured cashflow engineering to deliver enhanced risk-adjusted returns.
At issuance in July 2025, the transaction attracted measured market scrutiny, as is typical for innovative instruments.
Notably, the Notes achieved a transition from the sponsor’s BBB- rating profile at issuance to AAA ratings on the instrument by both Global Credit Ratings (GCR) and DataPro Limited, reflecting the strength of the structural enhancements, credit protections, and underlying asset quality.
Six months post-issuance, the successful delivery of the first principal and coupon payment represents a critical inflection point, demonstrating that the structure performs not only in design, but in execution.
The SBCNs are specifically designed to prioritise, Capital preservation, Predictable cashflow generation, Liquidity support mechanisms and Enhanced yield relative to comparable risk instruments
This combination has begun to resonate strongly with institutional investors seeking high-quality fixed income exposure in an evolving macro and yield environment.
Investor reception has strengthened following this first payment cycle, with increasing recognition of the SBCNs as a credible, de-risked, and performance-oriented instrument backed by a proven structuring platform and disciplined execution.
As market interest builds toward Series 2, the SBCN programme is increasingly positioned not merely as a successful issuance, but as a new benchmark for structured fixed income innovation in Nigeria’s debt capital markets.
In line with its mandate as a Development Investment Bank, DLM Capital Group remains committed to designing and delivering institutional-grade financial solutions that deepen capital markets, expand investor access to high-quality instruments, and support long-term economic development.
