Fidelity Bank Plc has issued 10-year N41.21 billion in fixed rate unsecured subordinated bond at a 8.5 per cent coupon rate due in 2031.
The bond issuance, which was fully subscribed given that total investor interest and commitments in the bonds were N56.6 billion, adds to the 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 domestic debt market for being the largest corporate bonds ever issued by a bank, including the deposit money banks and merchant banks.
Last 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.
Fidelity Bank Chairman, Mustapha Chike-Obi said the bond issuance further demonstrates our 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.
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, Mrs 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.