By Eugene Onyeji
Nigeria’s Small and Medium Enterprises friendly bank, Fidelity Bank, has announced the successful issuance of a 10-year N41.21 billion in fixed rate unsecured subordinated bond at a 8.5 per cent coupon rate due in 2031.
The bank made this known in a statement on Sunday titled, ‘Fidelity Bank Plc successfully issued the largest ticket Tier II local bonds in Nigeria.’
The bank said the debt-raising was 137 per cent subscribed as total investor interest and commitment came to N56.6 billion, affirming the bank’s “capacity to successfully execute debt capital market transactions.”
The bank stated, “The bond issuance, which was fully subscribed, given that total investor interest and commitments in the bonds were N56.6bn, adds to the impressive portfolio of landmark transactions structured by the bank, and underscores its capacity to successfully execute debt capital market transactions.
“The transaction 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 etc.”
It stated that the bonds were unsecured and subordinated, which would qualify as Tier II Capital in line with the Central Bank of Nigeria guidance notes on regulatory capital for commercial banks in Nigeria.
In December, Fidelity 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.
According to Fidelity Bank Chairman, Mustapha Chike-Obi, “The bond validates the continued investor confidence in our corporate strategy and aspirations, strong corporate governance structure and solid and stable executive management team with a robust history of superior financial performance and returns.”
The Chief Executive, Nneka Onyeali-Ikpe, said the decision to commit the proceeds of the transaction to the development of SMEs, retail business and technology infrastructure aligned with the lender’s Tier I ambition.
“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 bank stated that the issue was assigned a rating of A- by Agusto, and A by Datapro and would be listed on both the Nigerian Stock Exchange and FMDQ Securities Exchange Limited.
Fidelity Bank is a full-fledged commercial bank operating in Nigeria, with over 5.7 million customers who are serviced across its 250 business offices and various other digital banking channels.
