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Fidelity Bank Plc has successfully issued 10 years N41.21 billion in
fixed rate unsecured subordinated bond at a 8.5 percent 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 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.
In 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.
Speaking on the significance and success of the bond issuance, Fidelity
Bank Chairman, Mustapha Chike-Obi said that 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.
In her comments, 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, Onyeali-Ikpe added is in
line with the bank’s Tier I aspirations. According to her, our 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
added. 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 7 consecutive years while over 50 percent of its
customers are now enrolled on its digital platforms.