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We sat down with our Corporate Finance team to answer the questions that matter most to investors considering our ₦100 billion Commercial Paper Issuance.
What is the minimum investment amount, tenor, and expected yield?
The minimum subscription is ₦5,000,000, with investments in multiples of ₦1,000 thereafter. The CP is issued in tranches with tenors of 90, 180, and 270 days respectively. Indicative yields are competitive with prevailing Nigerian fixed-income benchmarks and will be confirmed at pricing. The Commercial Papers will be quoted on FMDQ and/or NGX, ensuring a regulated and transparent investment environment.
How will the Commercial Paper be repaid?
Repayment will come entirely from our operating cash flows — specifically, export proceeds and receivables generated under binding offtake contracts with our international partners. Our receivables are typically collected within 8 to 30 days of shipment, and our forecast 2026 cash flow after working capital is approximately ₦115 billion, providing 1.15x coverage of the ₦100 billion issuance. This is not a debt-refinancing exercise; it is a working capital instrument aligned to our short export cash conversion cycle.
How does Sunbeth manage commodity price risk on behalf of investors?
We actively hedge price and volume exposure using ICE Futures contracts through our international brokers, StoneX and Macquarie. For every confirmed export sale, we place an equivalent short hedge position that is closed at shipment. Any gains or losses on the futures position are offset against the physical sale, effectively protecting our trading margin. This back-to-back structure means our earnings are not at the mercy of commodity price swings.
What happens if cocoa prices crash or receivables are delayed during the CP tenor?
We have built our business to withstand exactly these scenarios. We maintain a portfolio of reputable counterparties with an average receivables collection timeline of no more than10 days post-shipment. Additionally, we hold committed but undrawn bank facilities— approximately 20% of which remain available during the CP tenor — as a liquidity buffer. Our current Liquidity Coverage Ratio stands at 1.2x, and we are actively working to improve it further.
At ₦200 billion programme size, how does this compare with others in the Nigerian market?
While the programme size is large, it is in line with issuances by well-rated and established Nigerian corporates. The size reflects the scale of the Company’s operations and its working capital requirements, rather than an aggressive increase in leverage..
Why issue all three tranches concurrently rather than staggering them?
Cocoa export cycles are seasonal and volume-intensive. Issuing three tranches concurrently — at 90, 180, and 270days — allows us to match funding tenors to specific trade legs in our pipeline. A staggered approach would introduce execution risk: if market conditions tighten mid-year. Concurrent issuance locks in funding certainty across the crop season and allows investors to select the maturity profile that best matches their own liquidity preferences.
Is this a secure and well-governed investment?
Yes. We’re currently rated A2 and A+ by GCR and DataPro respectively, placing us in line with the most credible CP issuers in the Nigerian market. We have a clean track record of servicing all short-term trade finance and bank facilities without default. There are no pending litigations, tax exposures, or contingent liabilities, and CP investors are not exposed to cross-default risks from any affiliate entities. Our governance framework, which underpins these ratings, is what gives the capital markets confidence in this issuance.
Get in touch
To invest or find out more, contact our Corporate Finance team at corporatefinanceteam@sunbeth.net or call 08147121004. We are ready to guide you through the process.
