How can investors analyze commercial papers of companies not listed on NGX in Nigeria?

Analyzing Commercial Papers (CPs) of companies not listed on NGX requires a different approach because you won’t have public financial statements easily available like listed companies. But there are still reliable ways to evaluate them.
Here is the professional approach investors use:
1. Start With the Issuing Document (Most Important)
Before any Commercial Paper is issued, the company releases:
Information Memorandum (IM)
Offer Circular
Programme Memorandum
This document contains:
Company overview
Financial statements (usually 3–5 years)
Purpose of borrowing
Risk factors
Directors and management
Repayment structure
Always request this document from:
Issuing house
Broker
Fund manager
If they cannot provide it, that is already a red flag 🚩
2. Check Credit Rating (Very Important)
Most credible Commercial Papers in Nigeria are rated by:
Agusto & Co
Global Credit Rating (GCR)
DataPro Limited
Look for ratings like:
A1 / A2 (Strong)
B (Moderate risk)
C (High risk)
Rule of Thumb:
A rating = safer
No rating = risky
If a company issues CP without rating, be extra cautious.
3. Check Where the CP is Registered
Most Nigerian Commercial Papers are registered on:
FMDQ Securities Exchange
Go to FMDQ website and search:
Company name
CP programme
Maturity period
Issuance history
This helps you confirm:
If the CP is legitimate
Past issuances
Repayment history
4. Verify Company Registration (Basic Due Diligence)
Check company details with:
Corporate Affairs Commission
Look for:
Years of operation
Directors
Shareholders
Business type
Avoid:
Newly formed companies issuing large CPs
Unknown management teams
5. Ask These 5 Key Questions Before Buying
Professional investors always ask:
What is the company’s business model?
What is the repayment source?
What is the maturity period? (30, 90, 180, 270 days)
Who is the issuing house?
Has the company issued CP before?
6. Check Who is Arranging the Deal
Commercial Papers are usually arranged by:
Investment banks
Asset managers
Issuing houses
Examples:
Stanbic IBTC Capital
Chapel Hill Denham
Vetiva Capital
If a reputable issuing house is involved, risk is lower.
7. Look at Yield vs Risk (Very Important)
Be careful of:
Extremely high yields
Example:
90-day CP at 30% → High risk 🚩
90-day CP at 18–22% → More reasonable
High return = high risk
8. My Personal Rule (Simple)
Only buy CPs that have:
✅ Credit rating
✅ FMDQ registration
✅ Known issuing house
✅ Financial statements available
If any two are missing, I usually avoid.