Fidelity Bank Lures Investors With 7.5% for N75bn 10-Year Bond
By Dipo Olowookere
Fidelity Bank Plc is looking to raise about N75 billion from the local bond market and its targets are “qualified institutional investors.”
Funds from the exercise are expected to be used to support growth in its risk assets in the SME and retail business as well as investments in technology and retail infrastructure, details of the bond sale sighted by Business Post showed.
The notes are expected to have a 10-year tenor. At the moment, subscription for the debt instrument has started. It commenced on December 7, 2020, and would be expected to close on December 14, 2020.
Fidelity Bank is issuing the papers through book-building at a coupon rate of 6.5 per cent to 7.5 per cent and with the recent low yield environment in the fixed income market in Nigeria, this could be seen as a fair deal.
The N75 billion bond is series 1 of the N100 billion bond issuance programme of Fidelity Bank, a mid-level financial institution in the country.
The bank said the minimum subscription for the exercise is N10 million or 10,000 units and multiples of 5,000 units at a unit price of N1,000.
The financial institution further said it should make the repayment for the bonds at maturity or on call, while the interest could be paid semi-annually.
After the bonds are issued to investors, they would be listed on the Nigerian Stock Exchange (NSE) and the FMDQ Securities Exchange.
It was disclosed that Agusto & Co rated the papers, while FCMB Capital Markets Limited acted as the issuing house.
Recall that in September, the Chief Operations and Information Officer of Fidelity Bank, Mr Gbolahan Joshua, had said the lender would issue bonds worth N100 billion in the fourth quarter of the year to boost its capital ratios and funding capacity.
He had further stated that the fresh capital would help increase the bank’s capital adequacy ratio by 2 percentage points, from 18.8 per cent in June.