United Nigeria Airlines Company Limited is planning to raise N20 billion through its debut commercial paper issuance, becoming the first domestic airline in Nigeria to tap the short-term debt market, as it seeks to strengthen its finances and fund an expansion of its flight operations.
The proposed issuance comprises Series 1 and Series 2 commercial papers with tenors of 270 days and 364 days, respectively, under a N100 billion commercial paper programme.
According to the airline’s September 2026 investor presentation, the transaction will be arranged by Meristem Capital Limited, with Cordros Advisory Services Limited, Coronation Merchant Bank Limited, FCMB Capital Markets Limited, FSL Advisory Limited and Quantum Zenith Capital & Investments Limited serving as dealers.
The planned fundraising comes as the airline pursues a five-year expansion strategy covering domestic, regional and international operations, supported by additional aircraft, new international routes and partnerships with global travel distribution platforms.
Airline records N95.6 billion revenue in H1 2026
United Nigeria Airlines’ planned entry into the commercial paper market follows significant growth in its financial performance over the past five years.
- The airline’s revenue rose from N10.3 billion in 2021 to N90.8 billion in 2025, while profit after tax increased from N1.3 billion to N23.8 billion over the same period.
- It recorded revenue of N95.6 billion in the first half of 2026, exceeding its full year 2025 revenue.
- Its August performance also showed an improvement, with turnover increasing to N19.4 billion from N14.1 billion in July. The airline returned to a net profit of N1.2 billion during the month.
The performance provides financial context for the planned fundraising, although the airline has not disclosed the expected yields, offer opening date or specific allocation of proceeds from the proposed N20 billion issuance in the information provided.
United Nigeria Airlines also received credit ratings from two agencies ahead of the transaction.
Agusto & Co. assigned the airline an A3 short term rating and a BBB minus long term rating, with a stable outlook. DataPro assigned short-term and long term ratings of A1 and BBB, respectively.
Airline plans to expand fleet and international routes
United Nigeria Airlines currently operates 10 aircraft, comprising Embraer ERJ 145s, Boeing 737 800s, Embraer E190s and CRJ900s.
- The company plans to take delivery of six additional aircraft before the end of 2026, which would expand its fleet to 16 aircraft if the deliveries are completed as planned.
- The airline currently serves 14 destinations across Nigeria and Ghana and has secured approval to operate as a flag carrier to six international destinations.
It has also signed global distribution system agreements with Amadeus and Sabre, enabling travel agents worldwide to access its ticket inventory.
Corporate commercial paper issuances rise
The proposed transaction comes amid growing reliance on commercial papers by Nigerian companies seeking alternatives to conventional bank borrowing.
- According to Nairametrics Research, Nigerian corporates raised N1.61 trillion through commercial paper issuances in 2025, representing a 40% increase from the N1.15 trillion recorded in 2024. The figures were compiled from data provided by FMDQ.
- The average discount rate on commercial papers rose to 22.38% in 2025, from 21.69% in 2024, while the average tenor increased to 233 days from 225 days. The trend reflected continued corporate demand for short term funding despite elevated borrowing costs.
Commercial papers are short-term debt instruments through which companies raise funds from investors, typically to finance working capital, operational expenses and other near-term funding requirements. They can provide an alternative to bank loans, although the cost of raising funds depends on market conditions, tenor and the issuer’s credit profile.