Nova Merchant Bank Limited has commenced book-building on its N10 billion issuance of seven-year Fixed Rate Subordinated Unsecured Bond issue. In line with the regulations of the Securities and Exchange Commission (SEC), the Bond is being issued through NOVAMBL INVESTMENTS SPV PLC, a special purpose vehicle sponsored by the Bank for the purpose of the Bond issuance. Nova Merchant Bank is issuing the Bonds under a SEC-approved N50 billion Debt Issuance Programme. The issuance, which opened on Tuesday 30th June 2020, will close on Wednesday 8th July 2020 and is open to institutional investors as well as High Net-worth Individuals who meet the requirements of the SEC’s rule 321.
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Nova Merchant Bank Limited is a licensed merchant bank in Nigeria, which is owned by experienced local and foreign investors, is one of Nigeria’s premium financial institutions. It offers a portfolio of products and services across Corporate and Investment Banking, Securities Trading and Asset Management, to a clientele comprising top-tier corporates and high net worth individuals. The Bank is rated BBB by Agusto & Co. and A+ by Datapro.
Why it matters: The Bank intends to use the proceeds from the bond issuance to invest in long-term risk assets, as a critical part of its medium-term growth strategy. Proceeds of the Bond issue will also serve as Tier-II capital for the Bank, within the requirements of the Central Bank of Nigeria.
The Bond transaction also represents Nova’s first entry into the Nigerian Debt Capital Markets, with potential for future issuances.
Details of the transaction are as follows:
Issuer: NOVAMBL Investments SPV Plc
Sponsor: NOVA Merchant Bank
Issue Size: N10 billion
Pricing guidance: 12% – 12.5%
Tenor: 7 years
Status: Subordinated, Unsecured
Offer Closing Date: July 6, 2020
Minimum Subscription: N10 million
Nova has an ambitious vision to be Africa’s preferred financial solutions provider, by creating superior value in the markets they serve. For the year ended December 31, 2019, the bank recorded 0% NPL, Gross earnings of N5.8 Billion, Profit after Tax of N1.6 Billion (growing at a CAGR of 48%), and Total Assets of N63.8 Billion, with a Return on Equity of 8.4%.