FCMB Group Plc has announced the issuance of N20.68bn perpetual 16 per cent fixed rate resettable NC5.25 additional tier 1 capital subordinated bond as part of its N300bn debt issuance programme.
In a corporate notice signed by the Company Secretary, Olufunmilayo Adedibu, to the Nigerian Exchange Limited, the firm said the N20.68bn bond was issued at a clearing coupon of 16.0 per cent per annum.
The group said that the AT1 issuance was the first non-Sharia local currency AT1 instrument issued in Nigeria and the group’s maiden issuance of its N300bn funding programme in the Nigerian capital markets.
For this instrument, the book build commenced on January 24, 2023, and closed on February 3, 2023, and the group said that the offer had received active participation from corporates, other financial institutions, trustees and high net-worth individuals.
The statement read, “The net proceeds from the Series I Bond will be invested in the Group’s banking subsidiary – First City Monument Bank Limited (“the bank”) – 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, the Group Chief Executive of FCMB Group Plc, Ladi Balogun, said, “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 three objectives for our 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 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.”
The Managing Director of First City Monument Bank Limited, Yemisi Edun, said, “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.”