Wema Bank to Sell N25bn Bonds at 16% for Robust Loan Portfolio

By Dipo Olowookere

A mid-level lending firm, Wema Bank Plc, is planning to sell corporate bonds worth N25 billion to specific investors to deepen its loan portfolio.

In a regulatory notice on Thursday, the bank said the debt instrument would be sold at an attractive coupon rate of 16 per cent, with the minimum subscription at N1 billion.

According to Wema Bank, the perpetual fixed rate non-resettable additional Tier 1 subordinated bonds would not be listed on any securities exchange as they would be issued privately to targeted investors.

It disclosed that bonds will be issued in a dematerialised form under a trust deed in denominations of N1,000, with maturity linked to the corporate duration of Wema Bank as a going concern and may be called by the issuer at its sole option and after giving a minimum of 20 days and a maximum of 60 days to the bondholders and bonds trustee subject to the relevant regulatory approvals.

Wema Bank stated that the funds from the exercise would be used to shore up its capital base to facilitate its business of lending to Small and Medium Enterprises (SMEs) in Nigeria.

“In addition, the additional Tier 1 bonds issuance would aid the bank in its digital dominance goal through improvements in our information technology infrastructures,” a part of the disclosure said.

In the statement signed by the company secretary and legal adviser, Mr Johnson Lebile, the bank pointed out that the professional parties to the bond issuance are Greenwich Merchant Bank Limited, Aluko & Oyebode, Olaniwun Ajayi LLP, United Capital Trustees, United Bank for Africa Plc, Greenwich Registrars and Data Solutions, and KPMG Professional Services.

Wema Bank trades its shares on the floor of the Nigerian Exchange (NGX) Limited, and at the close of business on Thursday, it quoted at N4.35 per unit, the same price it was sold a day earlier.