In Bond Issuance, Fidelity Bank Raises N41.21bn

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Nume Ekeghe

Fidelity Bank Plc has raised N41.21 billion through a 10-year fixed rate unsecured subordinated bond at a 8.5 percent coupon rate due in 2031. The bank, in a statement yesterday, said the bond issuance was fully subscribed given that total investor interest and commitments were N56.6 billion.

This, it stated, 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 said.

In December, the bank had announced plans to issue fixed income securities with 10-year tenor to support the growth and development of Small and Medium-sized 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.

Speaking on the significance and success of the bond issuance, Fidelity Bank Chairman, Mustapha Chike-Obi, was quoted to have said that the bond issuance demonstrated 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 said.

In her comments, Fidelity Bank CEO, Mrs. Nneka Onyeali-Ikpe, said 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.

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 stated.
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.

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.

The bank is focused on select niche corporate banking sectors, Small and Medium Enterprises (SMEs) and is rapidly implementing a digital-based retail banking strategy, which has resulted in annual double-digit growth in savings deposits in at least seven consecutive years while over 50 percent of its customers are now enrolled on its digital platforms.