Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo
Skye Bank Plc has issued the first tranche of its commercial papers worth N100 billion.
The bank signed on Tuesday an agreement with Stanbic IBTC and the Financial Market Dealers Quotation System (FMDQ) to issue the CP, which is meant to bolster its ability to do more transactions.
The first tranche of the transaction in the size of N20 billion, opened on Monday and is expected to close on March 27th, 2015.
The Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo, explained in a statement by the bank, that the bank took advantage of the commercial paper window to expand the number of instruments on its balance sheet.
According to him, the bank was driven “to take advantage of this programme to increase awareness of the availability of this innovative product in the market place and to help them acquire investments that are tradable without suffering penalty”.
Skye Bank is only the second bank to take advantage of the Central Bank of Nigeria (CBN) and FMDQ reintroduction of the Commercial Paper window since 2009; the transaction represents only the third since then, the statement added.
For a bank to qualify to issue commercial paper, it must be liquid, have a favourable credit rating of not less than B- and must have record assuring investors of their ability to perform, according to an Associate at G. Elias and Nosakhare Aguebor said.
Skye Bank has investment Grade ratings from GCR, Standard and Poors, and Agusto &Co.; A- By Global Credit rating; ‘BBB’ by S&P and ‘Bbb’ by Agusto and Co.
The CEO, Stanbic IBTC Capital, Yewande Sadiku, described the deal as a milestone in the history of market innovation in the country after thanking Skye bank for the opportunity to be involved in the landmark deal.
“Skye Bank is making the issue on the back of its strong brand and reputation; experienced and stable management team; good ratings; strong subsidiaries and presence in West Africa; and sound use of proceeds according to a summary document on the of Issuance programme.
The issue which has Stanbic IBTC as agents and adviser has a 90-Day tenor benchmarked against the 91-Day Treasury bill. Minimum subscription to the offer is N5, 000,000 and in multiples of N1, 000 and notes may be rediscounted at market price at investors’ option and subject to one week notice!” the statement added.
