Fidelity Bank to float N50bn bond 

Fidelity Bank Plc aims to sell up to N50 billion in Tier II debt before the second quarter of next year to refinance existing bonds as yields fall, the bank has said.

Bond yields have been declining on the local debt market in the face of recent central bank policies aimed at forcing lenders to boost credit to businesses and consumers, which could swell naira liquidity on the money market.

“We might issue naira bonds before Q2 2020 … between N30 billion and N50 billion,” its head of investor relations, Samuel Obioha, told a foreign wire service.

“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.”

In 2017 the bank issued a highly successful $400million five-year Eurobond with a 10.50 per cent coupon in what is the largest combined new issue & liability management offering ever by a Nigerian issuer.

Citigroup Incorporated, Renaissance Capital and Standard Bank Group Limited managed the deal, which included any-and-all cash tender offer for the early redemption of its $300 million 6.875 per cent Notes which was due  on May 9, 2018.

The tender offer was very successful with the repurchase of $256 million of its $300 million existing Dollar notes. This represented a tender hit ratio of 85 per cent, one of the best results recently achieved by peers.

Proceeds from the new $400 million issue due 2022 was used to finance the tender offer of $256 million and the balance (net issuance cost) will be used to support the trade finance business of the bank.

The bank conducted a focused marketing campaign, on the back of the strong tender offer and new issue investor feedback.

The strong demand for the new issue and the transaction structure favouring existing holders during the new issue allocation led to a high conversion ratio with over 60 per cent of the holders of the old notes subscribing for the new notes.

The landmark Eurobond issue was twice oversubscribed (Order Book of $630 million), with the final.


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