FMDQ Begins Private Companies’ Bonds Noting Service

By Dipo Olowookere

As part of its efforts and unwavering commitment to foster the deepening of the Nigerian debt capital markets (DCM), FMDQ OTC Securities Exchange has commenced its Private Companies’ Bonds Noting Service.

The FMDQ PCB Noting Service is an initiative aimed to prescribe minimum standards, and provide the much-needed due diligence and transparency in the market for private long-term debt securities (bonds), by bringing these securities under appropriate governance and eliminating information asymmetry, thereby promoting credibility in the market for debt securities of private companies, which is currently marked by acute opacity.

Private companies’ bonds, which would be issued in the private market only via private placements and traded in the secondary market bilaterally, will be recorded on FMDQ’s platform for the promotion of unprecedented transparency in the PCB space, as well as good governance of the private companies.

The FMDQ PCB Noting Service offers a robust review and due diligence process for the noting of PCBs and restricts the availability of all the key information on the activities of the noted PCBs on a private basis, to only qualified counterparties via the FMDQ PCB Portal.

Private companies wishing to access the DCM for long-term funding via bond issuances, and noting same on FMDQ stand to gain from the attendant benefits a PCB noting on FMDQ provides.

These include, but are not limited to unmatched transparency, unique visibility, broad qualified institutional investor base and efficient noting process.

The FMDQ PCB Noting Service provides a robust and efficient platform through which private companies can contribute significantly to the growth and development of the Nigerian economy through the debt capital markets whilst preserving the integrity of the markets and promoting investor protection.

This service will ensure the provision of rare and valuable information on the features of all PCBs noted on the OTC Exchange for the effective valuation of portfolios containing these securities and the track record of the PCB issuers to enable sound investment decision making, as well as maintain up-to-date, timely and continuous information disclosure via the FMDQ Post-Noting Compliance Framework.