By Modupe Gbadeyanka
Tier-2 lender in Nigeria, Fidelity Bank Plc, has announced its intention to raise about $500 million Eurobond to be used for financing the tender offer of the existing $300 million notes and for its general banking purposes.
A statement signed by the chief executive of the financial institution, Mr Nnamdi Okonkwo, stated that the senior unsecured medium term deal notes would be listed on the Irish Stock Exchange, with the expectation that the notes will be traded on its regulated market.
According to Mr Okonkwo, both the Central Bank of Nigeria (CBN) and the Securities and Exchnage Commission (SEC) have given “no objection” approvals to the transaction.
“Fidelity Bank Plc is pleased to notify the Nigerian Stock Exchange (NSE) and the investing public of its intention to launch up to $500 million senior unsecured medium term deal notes.
“The bank intends to list the notes on the Irish Stock Exchange, with the expectation that the notes will be traded on its regulated market. The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have given ‘no objection’ approvals to the transaction.
“The bank intends to issue the notes directly but will retain the flexibility to substitute the issuer with an offshare special purpose vehicle, where market conditions require and allow for such, pprior to the maturity of the notes.
“The bank intends to utilise the net proceeds of the notes to finance the tender offer of the existing notes and for its general banking purposes.
“The bank will pay the net proceeds from the notes issuance after settling the existing notes into its foreign currency or converted into Naira, depending on the bank’s requirement from time to time.
“A certificate of capital importation will not be obtained in respect of the proceeds of the notes that are not converted into Naira because a CCI is only issued in respect of capital imported into Nigeria and converted into Naira.
“The bank intends to make principal repayment and interest payments on the notes from its foreign currency reserves since it will not be able to obtained access to the Nigerian foreign exchange market for the purpose of making such payments.
“Notwithstanding the foregoing, the bank may obtain the approval of the CBN to access the official foreign exchange market if for any reason the bank does not have sufficient currency reserves to meet the principal and interest payments due on the notes.
“The bank intends to make announcement regarding planned investor meetings in Europe and the United States in respect of the transaction.
“The commencement of the transaction will however be subject to finalising the transaction documentation and prevailing market conditions,” the statement to the NSE said.
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