February 25, 2021

Fidelity Bank says its N41.2b local bond over subscribed

Fidelity Bank local bond

 

Fidelity Bank Plc says it has successfully issued 10 years N41.21 billion in fixed rate unsecured subordinated bond at 8.5 percent coupon rate due in 2031.

The bond issuance which was said to have been fully subscribed given that total investor interest and commitments were N56.6 billion, adds to the impressive portfolio of transactions structured by the bank, and underscores its capacity to successfully execute debt capital market transactions.

The transaction, according to a statement Monday by the bank’s spokesman, Ejike Ndiulo, is a landmark achievement in the Nigerian domestic debt market for being the largest corporate bonds ever issued by a Nigerian Bank including the deposit money banks and merchant banks.

In December, the bank had announced plans to issue fixed income securities with 10-year tenor to support the growth and development of Small Medium Enterprises (SMEs), Retail Business as well as its technology infrastructure. The bank conducted the debt issuance under its registered N100 billion bond issuance programme.

The bonds are unsecured and subordinated, which will qualify as Tier II Capital in line with the Central Bank of Nigeria (CBN) Guidance Notes on Regulatory Capital for commercial banks in Nigeria.

READ: Fidelity restates support to MSMEs in Nigeria

Speaking on the significance and success of the bond issuance, Fidelity Bank Chairman, Mustapha Chike-Obi said it further demonstrated the bank’s confidence in Nigeria’s debt market. “It also validates the continued investor confidence in our corporate strategy and aspirations, strong corporate governance structure and solid and stable executive management team with robust history of superior financial performance and returns,” Obi explained.

In her comments, Fidelity Bank CEO, Mrs. Nneka Onyeali-Ikpe noted that proceeds from the transaction would be utilised to support growth in the issuer’s risk assets in SME and retail business as well as investments in technology & retail infrastructure. This, Onyeali-Ikpe added, was in line with the bank’s Tier I aspirations.  According to her, the bank’s business fundamentals have remained strong despite the challenging economic environment occasioned by the coronavirus pandemic and the attendant recession.

“The successful bond issuance highlights the confidence in the Fidelity brand, as well as our capability to expand our funding sources, and deliver innovative financial services to our esteemed customers”, she added. The issue was assigned a rating of A- by Agusto, and A by Datapro and will be listed on both the Nigerian Stock Exchange (NSE) and FMDQ Securities Exchange Limited.

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