By Dipo Olowookere
Bonds worth N50 billion would be offered to investors before the end of second quarter of 2020, Fidelity Bank Plc, a Nigerian lender, has disclosed.
The purpose of this offering is to use proceeds from the exercise to refinance existing bonds as yields continue to decline at the domestic market.
Quoting its head of investor relations, Mr Samuel Obioha, on Friday, Reuters said this bond issuance would be a new Tier II debt that should happen before May 2020.
“We might issue Naira bonds before Q2 2020 … between N30 billion and N50 billion,” Mr Obioha was quoted as saying.
Speaking further, he said, “Currently, we have a seven-year local bond issued in 2015 … callable after five years. We might issue a new Tier II bond before May 2020 to replace the existing bond and take advantage of its capital impact.”
Business Post reports that in October 2017, Fidelity Bank issued a $400 million Eurobond of which $256 million was used to repurchase medium-term notes due in May 2018, with the remaining proceeds used to trade finance for Small and Medium scale Enterprises.
In recent times, bond yields have been falling. This is coming at the time the Central Bank of Nigeria (CBN) has come with policies aimed at forcing commercial banks to increase their loan to deposit ratio to at least 60 percent. This is mainly aimed to spur the economy by increasing lending to businesses and consumers, which could boost Naira liquidity on the money market.
According to the central bank, financial institutions have till September 30, 2019 to meet this target and Fidelity Bank is safe going by its present LDR.
Last month, Fidelity Bank Plc has announced the creation of a special loan scheme for traders at the popular Auto Spare Parts and Machinery Dealers Association (ASPAMDA) market in Lagos.
The product, called ASPASMDA Traders Support Facility, is designed to assist the traders boost their business operations. However, the traders would only be able to access funds earmarked for the scheme from Thursday, August 1, 2019.
Earlier this month, the leading tier-2 lender, as part of its commitments to the growth of businesses in the country, unveiled a platform to support entrepreneurs in Nigeria with their basic need, funds and it is called Fidelity SME Funding Connect and is themed Entrepreneurship Meets Capital.
According to the Executive Director in charge of Lagos and South West at Fidelity Bank Plc, Mrs Nneka Onyeali-Ikpe, after providing the funding support to the beneficiary, the bank will do a follow-up to see the progress of the business venture.
“We are planning to do like a quarterly or semi-annually assessment of how the entrepreneur is making use of the assistance given by the bank. We want to be part of success of every business we support,” she had said at the media briefing in Lagos, the commercial capital of Nigeria, at the unveiling of the initiative.
