BY OLAPEJU OLUBI
United Nigeria Airlines has raised ₦22 billion through its first commercial paper (CP) issuance, exceeding its initial target of ₦20 billion following strong demand from investors.
The airline said it had closed the first tranche of its ₦100 billion commercial paper programme after the offer was oversubscribed, reflecting investor confidence in its financial performance and growth plans.
The company absorbed 10 per cent of the excess subscription, taking the amount raised to ₦22 billion, while returning the remaining funds to investors whose applications could not be fully met.
Speaking on the development, the Managing Director of United Nigeria Airlines, Mazi Osita Okonkwo, said the strong demand showed that investors had confidence in the airline’s business model and future prospects.
“The level of demand we received is a clear endorsement of our business model, and financial performance as well as the confidence the market has in our growth plans. The proceeds will support fleet expansion and operations. We are grateful to the investors who participated and we look forward to more active engagement with investors as we continue with our CP and other capital market programmes,” he said.
The issuance was divided into two series, with repayment periods of 270 days and 364 days.
The offer received credit ratings from two agencies. Agusto & Co. assigned the airline A3 short-term and BBB- long-term ratings, with a stable outlook, while DataPro gave it A1 short-term and BBB long-term ratings.
The Managing Director of Meristem Capital Limited, Rasaki Salawu, which served as the lead issuing house, said the successful offer marked the first commercial paper issuance by an airline in Nigeria.
He said the transaction attracted strong interest from asset managers, insurance companies and wealthy individual investors.
“We are proud to have served as Lead Issuing House for the registration of United Nigeria Airlines Limited’s ₦100 billion Commercial Paper Programme and the successful debut issuance of ₦20 billion under Series 1 and 2, which will support the company’s working capital needs,” Salawu said.
He added: “This is the first commercial paper issuance by an airline in Nigeria. It drew strong demand from a broad range of investors, including asset managers, insurance companies and high-net-worth individuals, reflecting the market’s confidence in the issuer.
“The issuance was oversubscribed, and the issuer chose to upsize by no more than 10%, to ₦22 billion, despite excess demand of more than ₦5 billion. This discipline reflects the company’s financial prudence. We believe this debut issuance will contribute meaningfully to the company’s growth objectives. We are pleased to have partnered with Cordros Capital and the other dealers to deliver this milestone.”
The funds are expected to support the airline’s working capital requirements, fleet expansion and operational activities.
United Nigeria Airlines currently operates flights to 14 destinations across Nigeria and Ghana and is making plans to expand its regional operations.
The airline also has approvals to operate as a flag carrier to six international destinations.
It is an International Air Transport Association (IATA) Operational Safety Audit (IOSA)-certified airline and has been an IATA member since 2022. It is also a full member of the African Airlines Association.
In 2026, the airline signed the IATA Multilateral Interline Traffic Agreement and secured Global Distribution System (GDS) agreements with Amadeus and Sabre, allowing travel agents worldwide to access its flight inventory.
Olapeju is a journalist and aviation reporter.
