Wednesday, February 28, 2018 / 03:59 PM /VFD Group
VFD Group raised N525 million in one week, exceeding the target of its Debt Note product. The offer, designed to raise N300m in one week, closed on February 16 at N525m representing a 175% subscription. The financial services focused investment group issued fixed rate unsubordinated secured Debt Notes of N1m only per note to sophisticated individual and corporate investors.
According to Adenrele Omolara, the Head of Sales at VFD Group, “We thoroughly researched the investment market and discovered the need for a retail-focused, high yield and tradeable financial instrument promoted and issued by a company with an impeccable reputation”. She further added that the “excitement exhibited by investors towards the offer was an indication of the Group’s understanding of the market’s needs.”
The Debt Notes are set at an interest rate of 19% per annum with a one-year tenor. They are backed by the issuer’s equity portfolio held by United Capital Trustees, thus giving the Debt Notes a 1:2 cover ratio.
Below is a breakdown of the offer performance:
* Investors whose applications were rejected would be advised on an alternate investment product with features similar to the Debt Note based on their show of confidence and commitment to the company. This is however subject to the consent of the investor
The Group Managing Director (GMD), Mr. Nonso Okpala, stated “VFD Group’s Debt Note affords retail investors an opportunity to earn a minimum interest of 19% with prospect of an enhanced yield as a result of the tradability of this financial instrument.”
Based on the product’s term sheet, Anchoria Asset Management (AAM), will provide an Over the Counter (OTC) platform for the purpose of trading these notes. There are also plans to list the Debt Notes on FMDQ as this is an innovative pilot scheme aimed at establishing an active OTC market for Debt Notes. The GMD further stated, “You can always count on VFD Group to provide leadership in product and service innovation in the financial sector”