MeCure Industries Opens ₦14 Billion Commercial Paper Offer Priced at 21% Yield

MeCure Industries Plc has opened an offer of up to ₦14 billion in Series 8 commercial paper under its ₦40 billion programme, the Lagos-based pharmaceutical manufacturer said, tapping domestic debt markets to fund working capital as it absorbs the cost of a recent investment cycle.

The offer opened on Wednesday, 14 October, and closes on Tuesday, 20 October, with allotment the same day and settlement on 21 October. The paper matures on 15 July 2027, a tenor of 267 days, and carries a discount rate of 18.2036% per annum and a gross implied yield of 21%, stated inclusive of withholding tax.

The terms in context

Investors subscribe below the repayment value and receive the face value at maturity. Minimum subscription is ₦5 million, with ₦1,000 multiples above that. The issue carries an A1 rating from DataPro and an A3 from GCR, and is to be listed on the Nigerian Exchange and/or FMDQ Securities Exchange.

The pricing marks a modest improvement on MeCure's last outing. February's Series 7 offered up to ₦10 billion over 269 days at a gross annualised yield of 21.75%. Series 8 therefore raises the target by ₦4 billion while cutting the yield 75 basis points over a similar tenor — a better result for the issuer in a market where short-term rates have eased since the central bank cut its policy rate to 23% in September.

Why the company is borrowing

Proceeds are designated for working capital, the recurring need of a manufacturer converting production and sales into customer receipts. But the balance sheet explains the urgency. In the first half of 2026, MeCure invested ₦16.69 billion in facilities and equipment against just ₦1.45 billion generated from operations; borrowing and existing cash bridged the gap, leaving ₦2.07 billion in cash at June.

Total borrowings rose 19.6% from December to ₦66.17 billion — roughly three naira of debt for every naira of shareholders' funds. Finance costs climbed 54.9% to ₦5.93 billion, absorbing 54% of operating profit, up from 49% a year earlier. Cheap, short-dated paper is the natural instrument to hold that ratio in check while the new capacity ramps up.

The operating backdrop

The underlying business is growing. Revenue increased 20.4% to ₦44.85 billion in H1 2026, and operating profit rose 41% to ₦10.90 billion as marketing expenses fell. In April, MeCure fully repaid a ₦3 billion bond, a track record that gives lenders a reference point on repayment discipline.

What to watch on allotment

The 20 October allotment will show whether investors will absorb the larger size at the advertised yield. Demand conditions matter beyond this issuer: a well-covered Series 8 at 21% would provide a fresh benchmark for other Nigerian manufacturers weighing short-dated issuance into the fourth quarter, while a thin book would signal that the recent rally in paper markets has limits at the corporate level.