Transcorp lists N10bn bonds on NSE, FMDQ ……. VANGUARD

As stock market drops by N331bn

Transcorp Hotels Plc, yesterday, listed N10billion corporate bond simultaneously on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange Plc to become the first entity to be listed on both exchanges this year, despite persistent decline in the stock market.

Performance across sectors was bearish as all sector indices closed in the red. Lafarge Africa dropped by 9.7 per cent followed by Dangote Cement which nosedived by -7.1 per cent, the most capitalised stocks in the sector pulled the Industrial Goods Index southwards (-7.7 per cent). Similarly, the Consumer Goods and Banking sector Indices fell 3.8 per cent and 1.6 per cent due to losses sustained in NESTLE (-5.0 per cent) and Zenith (-4.7 per cent).Meanwhile, stock market continued to nosedive as investors lostN331 billion in market capitalisation to close at N7.7 trillion. The All Share Index (ASI) fell 4.1 per centto settle at 22,550.83 points from 23,514.04 points it opened the market on Monday.

The Insurance and Oil & Gas Indices closed out the poor performance losing 1.2 per cent and 0.8 per cent respectively.

Meanwhile, while answering questions from newsmen after the listing, Managing Director/Chief Executive Officer, Transcorp Plc, Mr. Valentine Ozigbo, explained that the fund raised would enables the company to enhance its financial flexibility by diversifying its sources of funding while significantly extending the maturity of the Group’s funding and ensuring optimal capital mix. “We are delighted by the investor reception for Transcorp Hotels in the bond market as it was oversubscribed by 30 per cent,” Ozigbo said.

According to him “ This transaction represents part of our financing of the upgrade of the Transcorp Hilton Abuja and the development of a 5,000-seater multipurpose Banquet centre. The availability of funds enables us to enhance our financial flexibility by diversifying our sources of funding while significantly extending the maturity of the Group’s funding and ensuring optimal capital mix. We are delighted by the investor reception for Transcorp Hotels in the bond markets.

Ozigbo explained that the transaction was a 7-year fixed-rate bond due in 2022 under a N30 billion medium-term programme. “The subscription of the bond consisted of 7-year 16 per cent fixed rate (unsecured) bonds due in 2022. The 7-year bonds were fully underwritten by FSDH Merchant Bank Limited and United Capital Plc” he added.

Speaking, the Chief Executive Officer, NSE , Mr. Oscar Onyema said the listing is the first this year and would spur activities at the exchange, revealing that the N10 billion was the first tranche of N30 billion bond approved by the stock exchange.

Onyema said the bond was one of the efforts by the company to finance long-term projects, adding that the NSE was delighted with the listing. He urged more corporate companies to float corporate bonds this year with the current economic challenges to finance long-term projects.

Delivering the welcome address at the listing of the bond on FMDQ platform, Ms. Tumi Sekoni, Head, Marketing & Business Development Division,FMDQ, highlighted that the listing would contribute, in no small measure, to the growth of the Nigerian corporate bond market; with the planned initiatives of the Exchange to promote secondary market liquidity in the non-sovereign bond market in Nigeria serving to further enhance that growth.

Also, the Doyen of the stock market, Mr. Sam Nda commended the management and Board of Transcorp for raising fund from the market and listing the bond for investors to partake.

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