Fidelity Bank issues largest tier II local bond

Fidelity Bank has issued a 10-year N41. 21 billion unsecured subordinated bond at 8.5 percent coupon rate.

The bond, which is due in 2031, is the largest tier II bond ever issued by a Nigerian bank.

It was conducted under its registered N100 billion bond issuance programme.

The total investor interest and commitments in the bond issuance were N56.6 billion.

In December, the bank had announced plans to issue fixed income securities with 10-year tenor.

The bonds are unsecured and subordinated, which will qualify as tier II capital in line with the Central Bank of Nigeria (CBN) Guidance Notes on Regulatory Capital for commercial banks.

Speaking on the success of the bond issuance, Mustapha Chike-Obi, Fidelity bank chairman, said that the bond issuance further demonstrates the bank’s 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”, Obi explained.

In her comments, Nneka Onyeali-Ikpe, Fidelity Bank CEO, said proceeds from the bond issuance will be used to support growth in the bank’s risk assets in SME and retail business as well as investments in technology & retail infrastructure.

This, Onyeali-Ikpe added is in line with the bank’s tier I aspirations.

“Our business fundamentals have remained strong despite the challenging economic environment occasioned by the coronavirus pandemic and the attendant recession,” she said.

“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 added.

The issue was assigned a rating of A- by Agusto, and A by Datapro and will be listed on both the Nigerian Stock Exchange (NSE) and FMDQ Securities Exchange Limited.