Fidelity Bank Plc on Sunday, February 14, declared that it has successfully issued 10-year N41.21bn in fixed-rate unsecured subordinated bond at a 8.5 percent coupon rate due in 2031.
This was contained in a statement titled ‘Fidelity Bank Plc successfully issued the largest ticket Tier II local bonds in Nigeria’.
The statement read: “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.”
Recalled that the bank had announced plans to issue fixed income securities with 10-year tenor to support the growth and development of Small and Medium Enterprises, retail business as well as its technology infrastructure.
The financial institution conducted the debt issuance under its registered N100bn bond issuance programme.
The bank explained that the bonds were unsecured and subordinated, which would qualify as Tier II Capital in line with the CBN guidance notes on regulatory capital for commercial banks in Nigeria.
Commenting on the success of the bond issuance, Chike-Obi, Chairman, Fidelity Bank, Mustapha, noted that the bond issuance further demonstrated the bank’s confidence in Nigeria’s debt market.
Chike-Obi said: “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.”
On her part, the Chief Executive Officer, Fidelity Bank, Nneka Onyeali-Ikpe, remarked 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 and retail infrastructure.
Onyeali-Ikpe noted that this was in line with the bank’s Tier I aspirations, saying its business fundamentals had remained strong despite the challenging economic environment occasioned by the coronavirus pandemic and the attendant recession.
According to her, “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.”