DLM Capital redeems N20.161bn of N25bn SPV securitisation
By Cynthia Ezekwe
DLM Capital Group, a development investment bank , has redeemed a total of N20.161 billion, which is a major part of the CERPAC Receivables Securitisation Funding SPV and paid investors involved in the N25 billion future flow receivables backed securitisation transaction.
DLM Capital,in a statement, noted that the redemptions were for the Discrete and Series 1 bonds executed by the organisation.
The CERPAC N25 billion securitisation programme is a five-year bond issuance created in May 2017 when Continental Transfert Technique Limited sponsored the incorporation of the special purpose vehicle, to raise funds in connection with the funding programme for the purchase of current and future receivables accruing to the seller from the sale of the Combined Expatriate Residence Permit and Alien Cards (CERPAC Cards) in Nigeria.
Since its creation in 2017, CERPAC has had four issuance, the first N4.877 billion 5-year 18.25 per cent discrete bond due 2023, the N12.5 billion 5-year 15.25 per cent Series 1 bond due 2023, N1.600 billion 5-year 15.5 per cent Series 2 bond due 2023, and the N1.250 billion Series 3 bond due 2028.
Similarly, in November 2019, an asset backed commercial paper of about N2.87 billion was issued and fully repaid in June 2020. On January 15, 2023, the discrete N4.8 billion and Series 1 N12.5billion matured and were fully paid. Upon the final payment of both the discrete and Series 1 bonds, DLM also refunded the total sum of N2.3 billion kept in the Reserve accounts to Continental Transfert Technique Limited.
Since the course of the CERPAC transaction, DLM Capital Group had raised about N23.011 billion and paid a total sum of N31.144 billion covering both Principal and coupons to date. The CERPAC Series 2 and 3 bonds will mature on July 15, 2023 and July 15, 2028, respectively.
DLM Advisory, the Group’s investment banking subsidiary, headed by Emeka Ngene, acted as the issuing house on the deal while DLM Trust Company Limited, the Group’s trustee subsidiary, was the lead bond trustee.
Speaking on the redemption, Sonnie Babatunde Ayere, group managing director/CEO at DLM Capital Group said it was the first ever SEC approved combined offer, which allowed the SPV to issue both debt and equity at the same time and from the same prospectus to investors. Ayere pointed out that both the debt and equity had performed exceptionally well.
“ The equity investment returned year-on-year, an average of 55.65 per cent per annum beating most market indices, appreciating from N50 a share to N189 a share as of December 2022. Finally, whilst this transaction was initially frowned upon by real money managers in 2017, we were glad to note that at final redemption, a big chunk of the paper was finally held by the funds as they had come to find comfort from its fantastic performance and transparency,’ he said. ’
On her part, Ololade Razaaq, managing director, DLM Trust Company Limited noted that the receivables had posted very strong cash flows over the last decade till date. “Since the inception of the programme, there have been no record of delinquency or default as all investors received their principal and full coupon as and when due. This was also the first transaction in Nigeria to provide investors with a 100 per cent transparency by providing investors with detailed monthly performance reports,” Razaaq added.