Fidelity Bank Plc has issued a 10-year N41.21 billion fixed rate unsecured subordinated bond at 8.5 per cent coupon rate due by year 2031.
A statement on the bond by the management indicated that the bank’s Chairman, Mr. Mustapha Chike-Obi, disclosed that the bond issuance was over-subscribed by investors, with total investor interest and commitments in the bonds hitting N56.6 billion.
According to him, the transaction underscores the bank’s capacity to successfully execute debt capital market transactions.
It would be recalled that the bank had last December 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 Guidance Notes on Regulatory Capital for commercial banks in Nigeria.
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 enthused.
Commenting, the bank’s Chief Executive Officer, 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 and investments in technology and retail infrastructure.
Onyeali-Ikpe pointed out that this was in line with the bank’s Tier I aspirations.
According to her, the bank’s business fundamentals have remained strong in spite of 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,” the seasoned banker said.
The CEO said that the issue was assigned a rating of A- by Agusto, and A by Datapro and will be listed on both the Nigerian Stock Exchange and FMDQ Securities Exchange Ltd.