Nigerian companies battle steeper costs of servicing debt as yields rise

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Companies have raised the rates on their debt offerings to woo investors as yields rise.

Corporations tapping funds from the debt market of Africa’s biggest economy to meet working capital needs and other financial obligations are having to pay more for such, in a shift that means issuers may no longer be able to leverage low rates of the recent past to refinance higher-cost debt.

“Corporates such as Nigerian Breweries, Dufil Prima, Coronation and Fidson, also adjusted their yields upward in a bid to raise a combined sum of 70 billion naira,” it said. The urgency to shore up working capital and refinance high-priced loans had sparked off a frenzy for corporate debts of short tenor among issuers.

 

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