VFD Group opens N20bn commercial paper offer at yields of up to 23.5%

VFD Group Plc has opened a new commercial paper issuance of up to N20 billion as the investment company seeks additional short-term funding amid strong earnings growth in the first half of 2026.

The offer, which opened on August 28 and will close on September 4, 2026, is being issued under the company’s existing N50 billion Commercial Paper Programme.

The latest issuance comes just months after VFD Group successfully raised N27.2 billion through its Series 1 commercial paper programme, which was significantly oversubscribed by investors.

Two investment options available

The new offer is divided into two series, giving investors the option of choosing between 270-day and 364-day instruments.

The Series 2(A), with a 270-day maturity, carries a discount rate of 18.5498 per cent and an implied annualised yield of 21.50 per cent.

The Series 2(B), which matures after 364 days, has a discount rate of 19.0383 per cent and an implied yield of 23.50 per cent.

The minimum subscription is N5 million, with additional investments required to be made in multiples of N1 million.

Settlement for the transaction is scheduled for September 7, 2026, while the commercial paper has received an A1 short-term rating from DataPro.

What VFD Group plans to use the funds for

The company is expected to use proceeds from the issuance to support its short-term working capital requirements and broader funding needs.

Commercial paper provides companies with an alternative to traditional bank borrowing, allowing them to raise funds directly from eligible investors for relatively short periods.

For VFD Group, the latest issuance forms part of its wider capital management strategy as it continues to expand its investment portfolio and businesses across multiple sectors.

The group operates across financial services, capital markets, technology, real estate, hospitality, media and entertainment, infrastructure and energy.

Strong earnings provide backdrop

The commercial paper offer comes against the backdrop of a significant improvement in VFD Group’s financial performance.

The company reported a 100.8 per cent year-on-year increase in profit after tax for the first half of 2026.

Its gross earnings also increased by 30.5 per cent to N53.71 billion, reflecting stronger investment income and improved performance across its portfolio.

The company also approved an interim dividend of 24 kobo per share, further highlighting the improvement in its earnings position.

The stronger financial performance could be an important consideration for investors assessing the company’s ability to meet its obligations under the new commercial paper programme.

Previous offer attracted strong demand

Investor interest in VFD Group’s commercial paper programme has been significant.

Its Series 1 issuance, initially targeted at N15 billion, attracted sufficient demand for the company to increase the size of the transaction to N27.2 billion.

The offer was oversubscribed by approximately N12.2 billion, representing an 81 per cent oversubscription.

The earlier transaction was issued across the same 270-day and 364-day tenors and attracted institutional and high-net-worth investors.

The strong demand provides some indication of investor appetite for VFD Group’s debt instruments, although the performance of the previous issuance does not guarantee similar demand for the latest offer.

What investors should consider

For investors, the headline attraction of the new offer is the relatively high yield.

The 364-day instrument offers an implied yield of 23.50 per cent, while the 270-day paper offers 21.50 per cent.

However, investors should look beyond the headline return when assessing commercial paper.

Factors such as the issuer’s financial strength, maturity period, credit rating, liquidity and the risks associated with investing in corporate debt should be considered before committing funds.

Unlike an ordinary bank deposit, commercial paper is a debt instrument issued by a company and therefore carries issuer-specific credit risk.

The N5 million minimum subscription also means that the offer is primarily targeted at institutional and high-net-worth investors rather than smaller retail investors.

VFD’s growing capital base

The new commercial paper issuance follows other capital-market activities by VFD Group as it strengthens its balance sheet and expands its businesses.

The company completed a rights issue earlier in 2026, further increasing its capital base as it positions itself for its next phase of growth.

The company is listed on the Nigerian Exchange, having been admitted to the market in 2023.

Its diversified investment model means that its performance is influenced by developments across several sectors of the Nigerian economy.

A closely watched fixed-income opportunity

The latest N20 billion commercial paper offer arrives at a time when investors continue to seek attractive returns from Nigeria’s fixed-income market.

With the 364-day paper offering an implied yield of 23.50 per cent, the instrument could attract investors looking for alternatives to government securities and other short-term investments.

For VFD Group, the transaction provides another avenue to raise funding as it builds on the strong demand recorded during its previous commercial paper issuance.

The outcome of the offer will provide another indication of investor confidence in the company’s financial position and the appetite for corporate debt instruments in Nigeria’s current interest-rate environment.