DLM Capital Group, a leading development investment bank that provides innovative solutions to economic and social developmental problems that impact the everyday lives of people, has issued a pioneering ₦30 billion Series-1 Sovereign Bond Backed Composite Notes (SBCNs) through its DLM Funding SPV Plc, marking a major innovation in Nigeria’s and potentially the global debt capital markets.
This new bond structure, described as a first-of-its-kind public market instrument, blends the principal and interest protection of Federal Government of Nigeria (FGN) Bonds with the yield-enhancing cash flows of diversified consumer and SME loans.
Rated AAA and offering an attractive Hold-to-Maturity (HTM) yield of 49.9%, the DLM Capital’s SBCNs present a dual-engine investment strategy that bridges sovereign safety with private sector performance.
Dr. Sonnie Ayere, chairman of DLM Capital Group, speaking at a press conference where the novel business idea was unveiled, disclosed that the instrument was designed to facilitate financial inclusion by unlocking credit for underserved markets in the country.
He said,
“The Sovereign Bond Backed Composite Notes is focused on de-risking the Nigerian financial market to attract pension funds, development finance institutions and asset managers. It will support Nigeria’s non-oil GDP diversification through credit expansion.”
“We believe that the consistent issuance of SBCNs by qualified entities will play a key role in de-risking corporate bond portfolios. By blending sovereign-backed security with enhanced yield exposure, portfolio managers gain a rare opportunity to simultaneously increase portfolio safety and performance,” he added.
“DLM’s SBCNs are not just bonds — they are a bridge between safety and performance,” said a spokesperson from the firm. “By integrating sovereign and private sector credit engines into one tradable structure, it redefines the frontier of income investing.”
Backed by an SPV structure to ensure asset and liability ringfencing, the bonds are positioned for institutional portfolios, particularly pension funds, DFIs, and asset managers seeking enhanced yield within stringent risk parameters.
The initiative is also expected to support Nigeria’s financial inclusion goals and non-oil GDP diversification through expanded access to consumer and SME credit.
Market analysts see this innovation as a critical advancement in capital market instruments, especially within frontier economies where risk-adjusted returns have traditionally been harder to structure effectively.
The issuance signals a transformative step in leveraging capital markets for broader economic impact, enabling safer, high-yield investments while catalyzing growth in Nigeria’s underbanked and high-growth sectors.
Why is DLM’s SBCNs Unique?
See:
