ThriveAgric lists N5.26bn commercial paper on NGX

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Read History Go to My Account Log Out Enhanced by Google Markets ThriveAgric lists N5.26bn commercial paper on NGX ThriveAgric Limited has listed N5.26 billion worth of commercial papers on the Nigerian Exchange Limited (NGX), giving the agritech company

Listen to this article Share ThriveAgric Limited has listed N5.26 billion worth of commercial papers on the Nigerian Exchange Limited (NGX), giving the agritech company access to short-term funding from Nigeria’s domestic debt market.

The issuance comprises two tranches under the company’s N50 billion Series 1 Commercial Paper Issuance Programme, with Anchoria Capital Group acting as the lead sponsor.

The first tranche raised N3.17 billion through a 270 day instrument carrying a discount rate of 19.6558 percent and an effective yield of 23 percent.

The second tranche raised N2.09 billion, with a 364-day maturity, a discount rate of 20.011 percent and an effective yield of 25 percent.

The difference in yields reflects the longer commitment required from investors for the second instrument. Investors subscribing to the 364 day paper are offered a higher return for keeping their funds invested for a longer period.

For ThriveAgric, the listing provides another channel to finance its business without issuing additional shares or diluting existing ownership. Commercial papers are short-term debt instruments that companies typically use to support working capital, manage cash flow and meet operational financing needs.

The funding route is particularly relevant to businesses operating in agriculture, where cash requirements can arise ahead of revenue collection. Financing gaps between procurement, production, distribution and payments can put pressure on working capital, making access to short-term credit important.

However, commercial paper funding also comes with repayment obligations. Unlike equity capital, which does not have a fixed maturity date, ThriveAgric will be required to repay investors at the end of the respective tenors.

The N50 billion programme gives the company room to make further issuances, subject to market conditions and applicable regulatory requirements. The N5.26 billion listing represents an initial step in that broader funding arrangement.

The transaction also adds another corporate issuer to the NGX debt market, where commercial papers provide businesses with an alternative to conventional bank borrowing.

For investors, the effective yields of 23 percent and 25 percent offer relatively high nominal returns. However, the attractiveness of those returns must be considered alongside the issuer’s creditworthiness, repayment capacity and prevailing interest-rate environment.

Ultimately, the significance of the listing goes beyond the amount raised. It provides ThriveAgric with an additional funding channel while testing the appetite of domestic investors for short-term corporate debt issued by businesses outside the traditional banking and energy sectors.