Fidelity Bank issues largest ticket Tier II local bonds

Fidelity Bank Plc says it has successfully issued 10 years N41.21 billion in fixed rate unsecured subordinated bond at 8.5 per cent coupon rate due 2031.

Mr Mustapha Chike-Obi, Fidelity Bank Chairman, disclosed this in a statement made available to our reporter on Sunday in Lagos.

Chike-Obi said that the bond issuance which was fully subscribed given that total investor interest and commitments in the bonds were N56.6 billion.

According to him, the transaction underscores the bank’s capacity to successfully execute debt capital market transactions.

Recall that in December, the bank 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 explained.

Mrs Nneka Onyeali-Ikpe, the bank’s Chief Executive Officer, 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 & retail infrastructure.

Onyeali-Ikpe added 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,” she said.

She 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.