Fidelity Bank Plc in a notice sent to the Nigerian Stock Exchange yesterday, announced its intention to launch up to $500 million in medium term debt notes, as well as a tender offer to purchase its outstanding $300 million 6.875% notes due in March 2018. The bank intends to list the notes on the Irish Stock Exchange, with the expectation that the notes will be traded on its regulated market. The Central Bank of Nigeria (CBN) has given ‘No objection’ approval of the transaction. The bank intends to issue the notes directly, but may decide to use a Special Purpose Vehicle (SPV) depending on market conditions.
The bank will not be requiring a Certificate of Capital Importation (CCI) as proceeds from the issuance, as a CCI is only obtained for capital imported into Nigeria and converted into Naira. The bank may however decide to obtain approval from the CBN to access the official foreign exchange market in the event of it not having sufficient foreign currency reserves to meet the repayments due on the note.
What will the funds raised be used for ?
Fidelity Bank intends to utilize the proceeds of the notes, to finance the tender offer for the existing notes, and general banking purposes. The bank will pay the net proceeds from the issuance, after settling the existing notes.
Here is a copy of the note.
Fidelity Bank shares are currently trading at N1.30 in today’s session on the Nigerian Stock Exchange (NSE), up 54% year to date. Half year results for the bank show gross earnings increased from N70.2 billion in 2016 to N85.8 billion in 2017. Profit before tax increased from N6.1 billion in 2016 to N10.1 billion in 2017.