Fidelity Bank Plc, on October 11, 2017, priced a successful $400m five-year Eurobond with a 10.50 per cent coupon in what is the largest combined new issue and liability management offering ever by a Nigerian issuer.

Citigroup Incorporated, Renaissance Capital and Standard Bank Group Limited managed the deal, which included an any-and-all cash tender offer for the early redemption of its $300m 6.875 per cent notes due May 9, 2018.

The bank, in a statement on Monday, said the tender offer was very successful with the repurchase of $256m of its $300m existing United States dollar notes due in May 2018. This represented a tender hit ratio of 85 per cent, one of the best results recently achieved by peers.

Proceeds from the new $400m issue due 2022 was used to finance the tender offer of $256m and the balance (net issuance cost) will be used to support the trade finance business of the bank, according to the statement.

The company was said to have conducted a focused marketing campaign on the back of the strong tender offer and new issue investor feedback. The strong demand for the new issue and the transaction structure favouring existing holders during the new issue allocation, was said to have led to a high conversion ratio with over 60 per cent of the holders of the old notes subscribing for the new notes.

The landmark Eurobond issue was twice oversubscribed (Order Book of $630m), with the final coupon ultimately set at 10.50 per cent. The transaction achieved a wide market distribution with over 100 investors from the United Kingdom, United States, Continental Europe, Asia and Africa subscribing to the new issue.

The Managing Director, Fidelity Bank, Mr. Nnamdi Okonkwo, was quoted in the statement to have said, “We are delighted to have successfully completed the offering, and believe the transaction has a big positive signaling effect.

“It paves the way for other banking institutions, especially the tier-two banks in Nigeria to explore the Eurobond source of funding in the international arena and talk to the global emerging markets investor community as Nigerian market rebounds and we see bigger demand for strong local stories.”

Fidelity Bank’s $400m issue demonstrated strong trading upon entering the market post-pricing, cementing the Eurobond’s robust position, the bank said.

Fidelity is a full-fledged commercial bank operating in Nigeria with over 3.8 million customers who are serviced across its 240 offices and various digital banking channels. The bank is focused on select niche corporate banking sectors, Small and Medium Enterprises and is rapidly implementing a digital-based retail banking strategy.

Over the last 3.5 years, the strategy, it explained had resulted in: a 93 per cent growth in savings deposits; 50 per cent customer enrollment on debit cards and 30 per cent of its customers now using its flagship mobile/internet banking products.

Fidelity Bank recently released its Audited H1 2017 results which showed a major improvement on all indices with gross earnings increasing by 22 per cent to N86bn, expenses declining by two per cent to N31bn and profit before tax increasing by 67 per cent to N10bn.