Chellarams plc last Thursday February 16, 2012 issued a N540 million bond. The bond which was approved by the Securities and Exchange Commission (SEC), is the series 2 senior unsecured floating Rate bonds under the N5billion Chellarams Plc Medium Term Note Progamme.

The issuer (Chellarams plc) was incorporated as a private limited company on 13thAugust 1947. The conglomerate was listed on the Nigerian Stock Exchange as a public company on November 29, 1990.

Documents made available to Business Ay at the available to Business day at the completion board meeting held in Lagos n Thursday February 12, 2012 in respect of the offer for subscription show that the issue is the Series-2 N540million (MPR + 5percent) Senior Unsecured floating rate Bond due February 17, 2019 with an issue price of N1,000 per unit. The Series 2 bond, was assigned a BBB- and BBB rating from Global Credit Rating and DataPro Limited respectively. This is the second bond issued under the N5billion Chellarams Plc Medium Term Note Programme.

the principal activities of Chellarams Plc and its subsidiaries comprise of distribution, trading, assembling of motorcycles and bicycles; manufacturing of bakery product packaging materials, chemical supplies, retail clothing, electronics, packaging of milk products and other dairy products. Sonnie Ayere, managing director/ chief executive officer, Dunn Loren Merrifield, the Issuing House/Book Runner said: “This Bond issuance is a reflection of the appeal of the corporate Bonds market. Furthermore, the rich history of the Chellarams Plc spanning over 60 years in Nigeria 1 issue contributed I no small measure to the Series 2 bond issuance.”

Speaking further, Ayere said that the proceeds of the bond will be applied towards replacing infrastructure investment in associated companies (Dynamic industries and Woolworths Retails Stores).

Woolworths Retails Store is 50:50 joint venture with Woolworth South Africa, while 55:56 percent of the issue will be to refinance maturing debt obligations to reduce the company’s interest burden.

Besides helping the nation’s capital market become more balanced corporate bonds help companies diversify their option for sourcing much needed funds, Ayere added.