Fidelity Bank to Buy Back $300m Debt from Investors
By Modupe Gbadeyanka
One of the tier-2 banks in Nigeria, Fidelity Bank Plc, has announced offering to repurchase its outstanding $300 million 6.875 percent notes due on May 9, 2018, offering $1,010 per $1,000 of the notes held by investors.
This comes few days after another lender, GTBank, offered to give cash to holders of its $400 million notes at 6 percent maturing in November 2018.
In a notice to the Nigerian Stock Exchange (NSE), Fidelity Bank Plc disclosed that it would buy back the notes from investors, though no further details were given.
In 2013, Fidelity Bank Plc issued $300 million Eurobond and got investors from the international market subscribing to it.
It had explained then that availability of the bond proceeds necessarily stabilizes is Dollar balance sheet, eases the pressure arising from demands from customers for tenured loans and enables the bank to target viable Dollar-dominated transactions.
The Eurobond issue was then jointly managed by two leading international banks, Deutsche Bank and Citibank.
A Eurobond issue is a debt instrument to raise money in foreign currency for strategic purposes and for a specified length of time, at a stated fixed cost.
At that time, Fidelity Bank noted that the international market was obviously impressed its fundamentals, especially its Capital Adequacy Ratio (CAR), which was 29 percent by December, 2012, compared to the regulatory base of 10 percent.
The bank also then enjoyed a strong Liquidity Ratio, which, at 47 percent, is much higher than the regulatory base of 30 percent.
According to the then Managing Director of Fidelity Bank Plc, Mr Reginald Ihejiahi, proceeds of the Eurobond would further enhance the capacity of the bank to support the critical sectors of the economy and meet the growing foreign currency needs of her clientele in oil & gas, power, infrastructure and manufacturing.