The Securities and Exchange Commission (SEC) has announced that all capital market stakeholders and prospective issuers must begin filing applications for the issuance of Commercial Papers (CPs) starting July 1, 2025.
The directive aligns with the updated “Rules on Issuance of Commercial Papers” released in December 2024.
According to the Commission’s notice, all CP applications must be submitted through the SEC’s e-portal for prior review and approval.
Commercial Papers are unsecured short-term debt instruments used by companies to raise funds for operational expenses and working capital needs.
Maturities must range from a minimum of 30 days to a maximum of 364 days, including rollovers.
Under the new framework, issuers must meet strict eligibility requirements, including a minimum of five years of operation and three years of audited financial statements. For CPs targeting retail investors, issuers must maintain shareholders’ funds of at least ₦500 million.
Issuers must also hold an investment-grade credit rating from a registered agency and cannot be in default on any existing debt. Where issuers do not fully meet requirements, credit enhancements or guarantees must be provided.
The SEC noted that CPs may be issued to institutional investors, high-net-worth individuals and retail investors, with private placements limited to five working days and public offers capped at ten working days.
The new rules are designed to strengthen investor confidence, ensure proper oversight and deepen Nigeria’s short-term debt market as companies seek alternatives to bank loans.
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