Interswitch Issues N23bn 7-Year Bonds at 15%, Plans NSE Listing

Interswitch N23 Billion Bond

By Dipo Olowookere

Leading technology-driven company focused on the digitisation of payments in Nigeria and other African countries, Interswitch Limited, has raised fresh capital of up to N20 billion through the sale of some corporate bonds.

The paper, with a lifespan of seven years, were issued at a coupon rate of 15 percent to investors via a Special Purpose Vehicle (SPV) Interswitch Africa One PLC.

The exercise was from the company’s N30 billion debt issuance programme registered with the Securities and Exchange Commission of Nigeria (SEC).

According to a statement from the firm, the Series 1 Issue was 2.6x subscribed and has a call option that can only be exercised from the second year. The notes are payable in full at maturity.

In the statement, Interswitch said, “An application will be made to list the bonds on the Nigerian Stock Exchange (NSE) on receipt of the SEC’s approval of the proposed allotments.

It was stated that during the sale of the debt instrument, investor participation was restricted to qualified institutional investors as defined by the apex regulatory agency in the Nigerian capital market, with a proposed bonds allocation of 64 percent to pension fund managers, 7 percent to asset managers and 22 percent to commercial banks pending SEC approval.

Interswitch said the strong level of over subscription demonstrated investor confidence in its brand, business model and long-term strategy, supported by strong domestic ratings from both Agusto & Co. Limited and Moody’s Investor Service.

The Issuer was assigned “Aa3” national scale programme rating (stable) by Moody’s and “Aa” (stable) national scale rating by Agusto, on the back of positive secular industry shifts, a strong market position and a good liquidity profile. The Sponsor was also assigned “Aa” (stable) rating by Agusto.

Commenting on the development, founder and CEO of Interswitch, Mr Mitchell Elegbe, stated that, “We are delighted to report the success of the first series of bonds issued under our programme, especially with the level of interest shown by investors. Diversifying our funding sources through the inclusion of these Bonds will enable us achieve our strategic objectives and vision.”

For the bond sale, FBNQuest Merchant Bank and Stanbic IBTC Capital were the Lead Financial Advisors/Issuing Houses, while ABSA Capital Markets Nigeria, FCMB Capital Markets, Quantum Zenith Capital & Investments and Rand Merchant Bank Nigeria were the Joint Issuing Houses.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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