VFD Group launches N15 billion Series 1 Commercial Paper, offers attractive short-term yields

VFD Group PLC has launched a N15 billion Series 1 (Tranche A & B) Commercial Paper issuance under its N50 billion Commercial Paper Issuance Programme, signalling its return to the Nigerian short-term debt market. The offer opened on Monday, February 16, 2026, and is scheduled to close on Thursday, February 19, 2026.

Details of the commercial paper issuance

• Programme size: N50 billion Commercial Paper Issuance Programme
• Series: Series 1 (Tranche A and Tranche B)
• Tenor: Tranche A: 270 days; Tranche B: 364 days
• Discount Rate (per annum): Tranche A: 18.55%; Tranche B: 19.04%
• Implied Yield (per annum): Tranche A: 21.50%; Tranche B: 23.50%
• Issue/Settlement Date: Friday, February 20, 2026
• Maturity Date: Tranche A: November 17, 2026; Tranche B: February 19, 2027
• Minimum subscription: N5,000,000 and multiples of N1,000 thereafter
• Repayment source: Cash flows of VFD Group PLC
• Quotation: FMDQ Securities Exchange Limited

VFD profile and investment rationale

VFD Group, incorporated in 2009 and listed on NGX in October 2023, is a proprietary investment firm operating in Nigeria, Ghana, the UK, and the US. The company offers alternative funding and investment solutions for individuals and small businesses, with a diversified portfolio across multiple sectors.

The commercial paper issuance offers competitive yields of 21.5% for Tranche A and 23.5% for Tranche B, reflecting a premium over short-term government securities. The investment case is supported by strong operating cash flows, which reached N85.2 billion in 2025, a 336.9% increase year-on-year. Profit after tax rose to N9.68 billion in 2025 from N8.69 billion in 2024.

Risks and considerations

Despite strong cash flows, the company’s interest coverage ratio stands at approximately 1.3 times, indicating a limited buffer if earnings decline or funding costs rise. Total borrowings reduced to N112.33 billion in 2025 from N121.43 billion in 2024, though a substantial portion remains in commercial notes and private placements. VFD Group is rated A+ (long term) and A1 (short term) by DataPro, reflecting good credit quality.

The Series 1 Commercial Paper is a high-yield, short-tenor instrument backed by robust cash flows and investment-grade ratings. It is suitable for yield-seeking investors willing to accept issuer risk, while conservative investors should monitor cash flow sustainability and funding structure closely.

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