DLM Capital Group launches N10 billion commercial paper: Takeaways for investors 

DLM Capital Group, a leading Nigerian development investment bank, has launched a N10 billion Series 2 Commercial Paper (CP) under its N20 billion CP Programme to raise short-term funding for working capital and general corporate purposes across its subsidiaries.

The offer, which opened on October 10, 2025, closes on October 20, 2025, with settlement on October 21, 2025.

Repayment obligations will be funded from the Group’s operating cash flow, reflecting confidence in its liquidity and revenue capacity.

Other offer details 

The issuance comprises two tranches: 

• Tranche A: 269 days, issued at a 19.67% discount rate and 23.00% effective yield, maturing July 17, 2026.
• Tranche B: 365 days, issued at a 19.69% discount rate and 24.50% effective yield, maturing October 22, 2026.

According to the press release, the notes may be quoted on the FMDQ Exchange platform or any other recognized exchange, offering investors secondary market liquidity.

Understanding the yield 

The discount rate represents the percentage deducted from the face value of the note at purchase, while the effective yield reflects the actual annualized return an investor earns at maturity, taking into account the time value of money.

Since CPs are issued at a discount and redeemed at par, the effective yield is higher, reflecting the true percentage gain over the investment period.

Inflation context 

With Nigeria’s headline inflation rate at 18.02% as of September 2025, both tranches of DLM Capital Group’s Commercial Paper offer compelling nominal returns relative to prevailing inflation and money market rates.

However, while Treasury Bills are virtually risk-free, DLM’s Commercial Paper carries corporate credit exposure, meaning investors should be compensated with a higher yield for taking moderate credit risk.

Credit rating overview 

The DLM Capital Group CP Programme enjoys strong short-term credit ratings from leading agencies:

• Datapro: A1 (Short-Term)
• Agusto & Co: S2 (Short-Term)
• GCR: A3 (Short-Term)

These ratings suggest adequate capacity for timely repayment of financial obligations and a low to moderate credit risk profile.

Issuer background 

DLM Capital Group is a diversified Development Investment Bank providing integrated financial services through subsidiaries in investment banking, securities trading, asset management, and lending.

The Group’s business model focuses on mobilizing capital for growth sectors such as agriculture, education, and renewable energy, while also deepening Nigeria’s capital markets through innovative financial instruments.

Recently, DLM completed a N9 billion Series 1 Sovereign Bond Backed Composite Notes (SBCN) issuance due 2035, a long-term, sovereign-linked instrument.

Investor takeaways 

• With effective yields up to 24.5%, the DLM CP offers a competitive rate relative to government securities and other money market instruments.
• At an effective yield of 23%, the 266-day tranche offers about a 5% premium over comparable 269-day NTBs (17.72%), justifying the additional corporate credit risk for investors seeking higher short-term returns.
• DLM’s recent N9 billion Sovereign Bond-Backed Composite Notes (SBCN) issuance complements this CP programme, enhancing liquidity and repayment capacity.
• Both tranches outpace current inflation (18.02%), delivering positive real returns for investors.