Bonds, commercial papers raked N3.44tn in two years, AIHN says

Elects Kemi Awodein as President

Private companies and government raised N3.44tn through Corporate Bonds and Commercial Paper issuance in two years, the Association of Issuing Houses of Nigeria announced yesterday. 

AIHN President, Ike Chioke, disclosed this at the group’s Annual General Meeting and presentation of 2022 yearly report in Lagos.

Presenting the group’s financial position as at December 31, 2022, he said its revenue increased by 31 per cent over the past three years. 

The group’s total assets stood at N416.14m in 2022, against the N361.05m it recorded in 2021. 

It also recored income of N85.41m in 2022, against the N64.78m of 2021. The group achieved income surplus of N53.98m in 2022, higher than N36.33m it posted in 2021 financial year. 

For Chioke, the growth underscores AIHN’s commitment to fiscal responsibility and efficient management of resources. 

According to him, the investment banking segment of the market achieved the milestones in 2022. Despite global and domestic macroeconomic headwinds, the sector sustained the momentum seen in 2021, as many economies continue to recover from the impact of Coronavirus Disease. 

He said, “Capital raising activities in the local environment consolidated on the successes recorded in 2021. Notably, 333 deals valued at about N3.44tn have been recorded over the last two years in the local debt market. This largely reflects the activities of corporates in the bonds and commercial paper issuance space, while also considering state-sponsored instruments.”

In August 2022, Chioke said, Dangote Industries Limited successfully closed its Series 1, dual tranche, bond issue N187.59bn under its N300bn bond issuance programme. He added that this was followed, in December 2022, by the issuance of the Series 2 bond of up to N112.42bn – the largest corporate bond ever in the Nigerian capital market. 

“Also, MTN Nigeria Communications established a N200bn store issuance programme under which it issued its N115bn Series 1 Bond in September 2022. The transaction is the first bond issuance by a Nigerian telecommunications company. 

“More recently, the Lagos State Government established a N1tn Debt and Hybrid Instruments Issuance Programme, under which it issued its Series 1 N115bn and Series 2 N19.82bn bond issuances in May 2023. These transactions, among many others, further substantiate the increased confidence of companies and investors in our local capital market,” he said.

In 2022, the weak growth outlook and tighter monetary policies impacted global debt levels and the fixed income space. 

“Although debt level fell 2.2 per cent year-on-year to $296.6tn in fourth quarter of 2022, global public and private Debt-to-Gross Domestic Product ratios remained well above pre-pandemic records. 

“In the bonds space, we witnessed unprecedented poor returns due to normalisation of policy rates, recession fears hurting credit spreads, and liquidity shocks driving up volatility,” he said. 

Chioke noted that the Seed and Series funding continue to report high deal volume, as technology-based start-ups intensify efforts to achieve business expansion. 

“Hence, traditional investment banks must innovate to survive and win market share in the growing Seed and Series funding space. Attracting night talent in the investment banking sector is, however, becoming increasingly difficult owing to competition from the financial technology companies and the increased emigration wave,” he said.

To support future growth, he advised investment banks to be innovative and consider increasing participation in the technology revolution that is shaping sectors around the globe. 

“This will create an opportunity for Artificial Intelligence to take on a greater role in assessing market opportunities and market data. These new technologies portend significant cost savings and delivery of innovative solutions for investment banks,” he said.

The AIHN also used the occasion of the AGM to appoint Kemi Awodein as President, after Chioke’s two-year tenure elapsed. 

Other Executive Council Members include Dr Gabdebo Adenrele (Vice President), Alhassan Gwarzo (Secretary, Finance) and Onyebuchim Obiyemi (Secretary, Administration).

In her acceptance speech, Awodein promised to do her best to justify the confidence reposed in her and other executive committee members by the group.

She said, “We will continue from where Chioke dropped the baton. We will continue to make giant strides in the development of the market. I ask for your collective support for us to achieve our collective goal of lifting the market. 

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