FCMB Group Lists N20.69bn Bond on Nigerian Exchange Limited
FCMB Group has reached a significant milestone by officially listing its N20.69bn bond on the Nigerian Exchange Limited (NGX).
This bond is part of FCMB’s N300bn Debt Issuance Program and is a perpetually fixed rate resettable NC 5.25 additional tier 1 subordinated bonds.
Each of the 20,686,000 units of the bond is priced at N1,000. The bond’s first interest payment date is scheduled for August 16, 2023.
Uniqueness of the Bond Issuance
The FCMB Group announced the issuance of the N20.68bn bond in March. This bond was seen as unique during its issuance as it was the first non-Sharia local currency Additional Tier 1 instrument to be issued in Nigeria.
The book build for the bond started on January 24, 2023, and ended on February 3, 2023. The bond received active participation from corporations, financial institutions, trustees, and high net-worth individuals.
The net proceeds from the Series I Bond will be invested in FCMB Group’s banking subsidiary, First City Monument Bank Limited. This investment is aimed at boosting the bank’s Tier 1 and total capital adequacy ratios. Ladi Balogun, the Group Chief Executive of FCMB Group Plc, lauded the innovation of the bond, stating that it was not dilutive for existing shareholders and offered an attractive income stream for investors.
He also mentioned that it generated the capacity for potentially improved earnings per share and dividends per share.
Endorsement by Financial and Capital Market Regulators
The successful issuance and listing of the bond were supported by the financial and capital market regulators. The Securities and Exchange Commission Nigeria and the Central Bank of Nigeria were particularly mentioned for their support.
The structure of the bond was considered innovative as it is a perpetual income yielding bond that qualifies as Tier 1 capital and a first of its kind in the domestic Capital Markets. The bond was praised for achieving three objectives for investors.
It is non-dilutive for existing shareholders, creates capacity for potentially improved earnings per share and dividends per share, and provides an attractive income stream for investors.
Supporting Growth and Development of the Nigerian Economy
The proceeds from the Series I Bond will be invested in the Group’s Banking Subsidiary, First City Monument Bank Limited.
This investment will enhance the Bank’s Tier 1 and total capital adequacy ratios, enabling the Group and the Bank to expand its support for the growth and development of the Nigerian economy.
The successful Series I Bond issuance highlights the Group’s track record of innovation across a broad spectrum of the Nigerian financial service industry. It aligns with the Central Bank of Nigeria’s desire for financial sector stability and well-capitalized banks.
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