• Thu. Jul 18th, 2024

FCMB Raises N20.687bn From Debt Market To Boost Capital

Byadmin

Mar 22, 2023

FCMB Group Plc. has successfully completed the issuance of a N20,686,000,000 perpetual 16% fixed rate resettable NC5.25 additional Tier I capital subordinated bonds (AT1) under its N300,000,000,000 Debt Issuance Programme, the group said in a regulatory filing.

Recall that in January 2023, VOM reported that the financial services recently pulled N30 billion from the local debt capital market to support its capital position, bringing the total raise to N50.686 billion in the first quarter of the year. FCMB to Raise N30 Billion from Debt Market

The AT1 issuance is the first non-sharia local currency AT1 instrument issued in Nigeria and the Group’s maiden issuance of its N300 billion funding programme in the Nigerian capital markets to support its next phase of growth, the group said.

FCMB commenced book build on January 24, 2023, and closed on February 3, 2023. The financial service group said the offer was well received by the market with active participation from a diverse range of high-value investors.

The category of investors that participated in the offer include Corporates, other Financial Institutions, Trustees and high net-worth individuals, adding that the AT1 instrument was issued at a clearing coupon rate of 16.0% per annum.

“The successful Series I Bond issuance highlights the Group’s track record of innovation across a broad spectrum of the Nigerian financial service industry and is in line with the Central Bank of Nigeria’s desire for financial sector stability and well capitalised banks.

“The net proceeds from the Series I Bond will be invested in the Group’s Banking Subsidiary – First City Monument Bank Limited – enhancing the Bank’s Tier 1 and total capital adequacy ratios and enabling the Group and the Bank to expand its support for the growth and development of the Nigerian economy”.

Commenting on the Series I Bond issuance, Ladi Balogun, Group Chief Executive said, “FCMB Group Plc is grateful to our investors, advisers and regulators for their support on the maiden issuance in our N300 billion bond programme”.

FCMB Group Chief noted that the innovative structure of a perpetual, income-yielding, bond that qualifies as tier 1 capital, – a first of its kind in the domestic Capital Markets – achieves 3 objectives for investors.

Balogun explained that the instrument is non-dilutive for existing shareholders; thus creating capacity for potentially improved earnings per share and dividends per share; and provides an attractive income stream for investors in this instrument.

“We are also pleased to have been able to support our largest banking subsidiary towards the attainment of its growth, risk management and strategic objectives with this investment.”

Also, Yemisi Edun, Managing Director of First City Monument Bank Limited said, “FCMB is very proud to be a part of a group that embraces innovation and thanks the investor community for their support which will enable the Bank to achieve its long-term strategy.

“In addition to strengthening the Bank’s capital base which will comply with the forthcoming application of Basel III capital requirements, the AT-1 bond will enable the Bank to finance incremental term lending in priority sectors.”

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