The Securities and Exchange Commission, SEC, has hinted the possibility of firms listed on the Nigerian Stocks Exchange, NSE, raising up to N200 billion from the debt market in 2018 through the issuance of bonds.
In an e-mailed response to Bloomberg, SEC said local firms could raise N200 billion ($554 million) of bonds in 2018, almost double the all-time high set two years ago.
The stock market regulatory body added that five companies have already submitted plans for debt sales totaling N60.5 billion.
Sterling Bank Plc is planning to approach the market after it abandoned a N65 billion bond issuance in 2016 as a result of high cost of borrowing in the country, 16.5 percent for N7.9 billion debt.
But with things getting back in shape, the lender may consider reviving the bonds sale later this year.
“With the recent inflation data, we expect to see improvement in interest rates in the coming months,” the Chief Executive Officer (CEO) of Sterling Bank, Mr Abubakar Suleiman, told Bloomberg.
Also, Managing Director of C&I Leasing, Mr Andrew Otike-Odibi, stated that, “The macro-economy is encouraging now,” giving companies the boost to mull the issuance of bonds to raise capital.
According to the CEO of Coronation Merchant Bank, Mr Abubakar Jimoh, the Nigerian bond market is big enough “to accommodate the size of the offers” expected this year.
He said there is “very massive” demand from local pension, insurance and asset-management companies as well as foreign investors for Nigerian assets.
“Owing to the recent strong liquidity in the market, largely driven by the reduction in domestic borrowing and the consequent downward trend in rates, we expect to see an increase in corporate bond issuance in 2018,” Mr Jimoh said.
He stated that Coronation Merchant Bank plans to raise short-term loans to fund trade deals between companies, while the bonds will help meet customers’ project-finance needs.
