How commercial paper funds cocoa exports: the Sunbeth example

How commercial paper funds cocoa exports: the Sunbeth example

Sunbeth Global Concepts, a Nigerian cocoa exporter, funds its inventory and hedged offtake with a N200 billion commercial paper programme rather than a bank line. Approved in March 2026, the programme raised N150.4 billion from capital-market investors, and the exporter repaid its first N25.1 billion series on schedule in September. Read as a worked example, it shows what non-bank money changes for a cocoa export business, and what a buyer should ask before signing a season-long contract.

The ceiling is N200 billion. According to Proshare, Sunbeth launched up to N100 billion in three series on tenors of 180, 270 and 364 days, opening the offer on 27 February 2026 at a N5 million minimum subscription, with quotation on FMDQ and/or NGX.

The stated purpose was contractual working capital: inventory procurement and the execution of physical and hedged offtake obligations in the export book.

Demand overshot. Sunbeth reported subscriptions of N165.73 billion and accepted N150.4 billion, sized to its working capital requirement, at discount rates of about 19.0% to 19.3% and implied yields of 21.0% to 23.5%. FMDQ Group announced quotation of N150.41 billion of the notes in a notice posted on 5 June 2026.

What does commercial paper fund that a bank line does not?

A commercial paper programme is a shelf approval, not a drawn facility. Each series is placed and priced separately, and unused headroom is capacity to issue more, not cash on hand. FMDQ quotation also brings continuing disclosure obligations that a buyer can read.

The tenor range is the tell. Money maturing in six to twelve months matches a cycle in which beans are bought, graded, bagged and shipped before the buyer pays. An exporter with funded working capital can keep buying agents paid through peak intake instead of rationing to cash on hand, and can commit volume forward with more confidence.

What changes at origin?

Scale is the point. Sunbeth works directly with more than 30,000 farmers and over 250 buying agents across Nigeria, and reports exports of more than 200,000 tonnes of cocoa beans since 2017. Tonnage and revenue should be read separately, a split we set out for Ugandan coffee. Working capital at that scale is an aggregation question: whether the exporter can take beans when farmers bring them, at the grade required, not when cash allows.

What this means for buyers

Read the maturity profile before the contract length. Series 1 matured on 4 September 2026 and was redeemed in full, Businessday reported. A season-long contract running past an exporter's next maturity date depends on rolling the paper or repaying it from shipment proceeds. Port delay is one way that assumption breaks, as at Tema. Ask which series funds your parcel and what repays it.

Separate approval from liquidity. Of a N200 billion programme, N150.4 billion was issued: the difference is issuance capacity, not a cushion.

Check the rating and the queue. Businessday reported A2 short-term ratings from DataPro, GCR, Agusto & Co. and Intelligence Africa, with long-term ratings between BBB and A. More useful than the grade is what the notes are earmarked for: physical and hedged offtake. A hedged offtake is a commitment to deliver, so ask what volume remains uncommitted.

Price the carry. Implied yields of 21.0% to 23.5% are the annualised cost of the money in the book, and that carry must be recovered on every tonne turned. It sets a floor under what an exporter can offer and gives a seller reason to sell forward early rather than hold stock.

FAQ

Q: What is a commercial paper programme?
A: A shelf approval under which an issuer sells short-term discount notes in separate series to qualified investors, each with its tenor and price, rather than drawing a bank facility.

Q: How much did Sunbeth raise and repay?
A: Subscriptions reached N165.73 billion against a N100 billion target and Sunbeth accepted N150.4 billion. The N25.1 billion Series 1 was redeemed on its 4 September 2026 maturity date.

Q: What should a cocoa buyer ask an exporter about its financing?
A: When the funding behind the parcel matures, what repays it, whether the programme is drawn or merely approved, the issuer's rating, and how much volume is already committed to hedged offtake.

Sources: Proshare | Sunbeth | FMDQ Group | Businessday