Dipo Olowookere
By Dipo Olowookere
Stanbic IBTC Bank is raising the sum of N35 billion by issuing commercial papers to investors, Business Post has learned.
The paper is in three tenors; 90-day, 180-day and 270-day. Subscription for the exercise commenced on May 31, 2019 and will close on June 7, 2019.
A statement obtained by Business Post showed that the process would be managed by Stanbic IBTC Stockbrokers, which is part of the Stanbic IBTC Holdings, which is also the parent company of the lender.
According to Stanbic IBTC Stockbrokers, the commercial paper is series 48, 49 and 50 of the N100 billion Commercial Paper Programme of the bank.
The stockbroking company stated in a statement on Thursday that the minimum subscription is N5 million and is free and clear of withholding taxes.
It further said the commercial paper programme of Stanbic IBTC Bank was rated AAA by Fitch and AA+ by Global Credit Ratings (GCR).
Commercial Papers (CPs) remain a very viable source of alternative funding for medium-large corporations who require capital to meet short-term financial obligations.
They are unsecured promissory notes with a fixed maturity of about nine months issued by firms to raise money to meet short term finance obligations.
The notes are backed by the promise of the issuers to repay based on certain agreed terms and they present a cost-effective and stable means of sourcing scarce capital as against to bank loans, providing investors avenue to diversify their portfolios.
Given by their short-term nature, commercial papers permit high relative return on investment, allowing investors to remain relatively liquid.
