Economy
DLM Capital Repays N20.161bn Taken from Bond Investors
By Aduragbemi Omiyale
The bond investors involved in the N25 billion CERPAC SPV securitization of DLM Capital Group have been repaid a total of N20.161 billion.
The CERPAC N25 billion Securitization Programme is a five-year bond issuance created in May 2017 when Continental Transfert Technique Limited sponsored the incorporation of the special purpose vehicle to raise funds in connection with the funding program for the purchase of current and future receivables accruing to the seller from the sale of the Combined Expatriate Residence Permit and Alien Cards (CERPAC Cards) in Nigeria.
CERPAC Receivables Funding SPV is unique in the sense that the only metric that informs the success of the company is the performance of the purchased CERPAC Receivables, which in turn are used to service the SPV’s debt obligations.
In a statement from DLM Capital, it was disclosed that the redemptions of the N21.161 billion were for the discrete and series 1 bonds executed by the organisation.
Since its creation in 2017, CERPAC has had four issues: the first N4.877 billion 5-year 18.25% discrete bond due 2023, the N12.5 billion 5-year 15.25% Series 1 bond due 2023, N1.600 billion 5-year 15.5% Series 2 bond due 2023, and the N1.250 billion Series 3 bond due 2028.
In November 2019, an asset-backed commercial paper of about N2.87 billion was issued and fully repaid in June 2020, and on January 15, 2023, the discrete N4.8 billion and Series 1 N12.5 billion matured and were fully paid.
Upon the final payment of both the discrete and series 1 bonds, DLM also refunded the sum of N2.3 billion kept in the reserve accounts to Continental Transfert Techniques Limited.
Since the course of the CERPAC transaction, DLM Capital Group has raised about N23.011 billion and paid a total sum of N31.144 billion, covering both principal and coupons to date. The CERPAC Series 2 and 3 bonds will mature on July 15, 2023, and July 15, 2028, respectively.
“The current collateral cover to the remaining investors in Series 2 & 3 as of December 2022 was 34.5x, average DSCR (including principal) is approximately 4x and current credit enhancement is 64.17 per cent,” the chief executive of DLM Capital, Mr Sonnie Babatunde Ayere, said.
Speaking further, he disclosed that, “Based on these facts, the rating agencies should have re-rated the deal for an upgrade. This was the first ever SEC-approved combined offer, which allowed the SPV to issue both debt and equity at the same time and from the same prospectus to investors.
“Whilst the debt has performed fantastically well, so has the equity. The equity investment returned year-on-year an average of 55.65 per cent per annum, beating most market indices, appreciating from N50 a share to N189 a share as of December 2022.
“Finally, whilst this transaction was initially frowned upon by real money managers in 2017, we were glad to note that at final redemption, a big chunk of the paper was finally held by the funds as they had come to find comfort from its fantastic performance and transparency.”
On her part, the Managing Director of DLM Trust Company Limited, Mrs Ololade Razaaq, remarked that the receivables had posted very strong cashflows over the last decade till date.
“Since the inception of the programme, there has been no record of delinquency or default as all investors received their principal and full coupon as and when due.
“This was also the first transaction in Nigeria to provide investors with 100 per cent transparency by providing investors with detailed monthly performance reports,” she stated.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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