Fidelity bank issues 8.5% unsecured subordinated Bonds

TEN years N41.21 billion in fixed rate unsecured subordinated bond has successfully been issued by Fidelity Bank Plc at 8.5 per cent coupon rate due 2031.

Chairman of the bank, Mustapha Chike-Obi, in a statement said the bond issuance, which was fully subscribed, given that total investor interest and commitments in the bonds were N56.6 billion.

According to Chike-Obi, the transaction underscores the bank’s capacity to successfully execute debt capital market transactions.

Earlier in December, Fidelity bank announced plans to issue fixed income securities with 10-year tenor to support the growth and development of Small Medium Enterprises (SMEs), retail business as well as its technology infrastructure.

It also conducted the debt issuance under its registered N100 billion bond issuance programme.

The issued bonds are unsecured and subordinated, which will qualify as Tier II Capital in line with the Central Bank of Nigeria guidance notes on regulatory capital for commercial banks.

The bank’s Chairman said: “The bond issuance further demonstrates our confidence in Nigeria’s debt market.

“It also validates the continued investor confidence in our corporate strategy and aspirations, strong corporate governance structure and solid and stable executive management team with robust history of superior financial performance and returns.”

The bank’s Chief Executive Officer, Mrs Nneka Onyeali-Ikpe, also said that proceeds from the transaction would be utilised to support growth in the issuer’s risk assets in SME and retail business and investments in technology & retail infrastructure.

The CEO stated that this was in line with the bank’s Tier I aspirations.

According to Onyeali-Ikpe, the bank’s business fundamentals have remained strong in spite of the challenging economic environment occasioned by the coronavirus pandemic and the attendant recession.

“The successful bond issuance highlights the confidence in the Fidelity brand, as well as our capability to expand our funding sources, and deliver innovative financial services to our esteemed customers,” she said.

She added that the issue was assigned a rating of A- by Agusto, and A by Datapro and will be listed on both the Nigerian Stock Exchange and FMDQ Securities Exchange Ltd.