Tier 2 lender Fidelity Bank says it has completed the issuance of a fixed rate unsecured bond of N41.21 billion with a tenor of 10 years at an 8.5 per cent coupon rate.
The transaction, which was executed under its registered N100 billion bond issuance programme, will mature in 2031, a document obtained by PREMIUM TIMES showed.
Given its nature as a subordinated debt, the bond ranks beneath other, more senior loans or instruments with regards to claims on assets or earnings. It means creditors in possession of this kind of security will not be paid out unless senior bondholders are fully paid in the event of a default.
The bank said the debt-raising was 137 per cent subscribed as total investor interest and commitment came to N56.6 billion, affirming the bank’s “capacity to successfully execute debt capital market transactions.”
According to Fidelity Bank, “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.”
Lagos-based Fidelity Bank in December declared its aspiration to issue fixed income securities of a 10-year tenor to support Small and Medium-sized Enterprises (SMEs), retail business and technology infrastructure.
The bond “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,” said Fidelity Bank Chair Mustapha Chike-Obi.
Nneka Onyeali-Ikpe, Fidelity bank’s chief executive, said the decision to commit the proceeds of the transaction to the development of SMEs, retail business and technology infrastructure aligned with the lender’s Tier I ambition.
“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.