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Fidelity Bank’s N30Bn Bond Is Listed On Stock Exchange

FIDELTYFidelity Bank Plc’s N30 billion bond has been admitted into the Daily Official List of the Nigerian Stock Exchange (NSE).
Accordingly, all the investors/bondholders’ Central Securities Clearing System (CSCS ) account have been credited with the number of units of bonds each one invested in and trading has now commenced in earnest in the secondary market.

Fidelity Bank, earlier in May this year, issued N30 billion, 16.48 percent fixed rate domestic-currency-denominated bond. It is a 7-year fixed rate subordinated unsecured debt instrument due in 2022.

The bond is callable with a call protection period of 5 years and issued at par and qualifies as securities because Pension Fund Assets could be invested under the Pensions Reforms Act 2014.

The implication is that the bond also qualifies as securities in which Trustees can invest under the Trustees Investments Act, Cap T22, LFN, 2004. The bond issuance was fully underwritten and the basis of allotment was approved by the Securities and Exchange Commission (SEC) in June 2015.

By this listing, Fidelity Bank’s quest to raise fresh capital to expand its support to the Small and Medium Enterprise (SME) segment of the country’s monolithic economy is headed in the right direction. The funds generated would also count as tier II capital in consonance with the guidelines of Basel II.

Mr Nnamdi Okonkwo, Managing Director/Chief Executive Officer, Fidelity Bank Plc has explained that the bank has earmarked 80 percent of the proceeds of the bond for SME financing – a move Okonkwo insists is in recognition of the importance of SMEs as the engine room of the economy.

Okonkwo said: “We are a very strong SME bank. So, we have raised this bond to channel it into our SME banking and to improve our retail infrastructure.”

He explained that the growth trajectory the bank witnessed in the SME sector last year is a pointer to the potentials of the sector adding, “if we properly provide the right infrastructure to that segment, it should be the new frontier to help us face the difficult environment that we are operating in.”

With the conclusion of the issuance of the bond and its subsequent listing, Fidelity Bank will reach out more in the SME banking space. The remaining 20 percent of the net proceeds will be used in financing retail lending and retail infrastructure, to the tune of 15 percent and 5 percent respectively.

Mr Henry Ndiulor, Head of Corporate Communications of the bank, in a statement on Monday said Fidelity Bank is a fully integrated commercial bank focused on building and maintaining a well-respected brand that caters to the needs of its growing corporate, commercial and consumer banking clientele.

Fidelity continues to maintain its leadership position in SME banking and it has won numerous prestigious awards over the years, the latest of which is the Lagos Chamber of Commerce & Industry SME Bank of the Year 2015.

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