Fidelity Bank Redeems $400m Eurobond, Strengthens Capital Position
Fidelity Bank Plc has redeemed its $400 million Eurobond in full at maturity, reaffirming its commitment to meeting financial obligations and strengthening its record in the international debt capital markets.
The five-year senior unsecured notes, issued on 28 October 2021, matured on 28 October 2026, carrying an annual coupon rate of 7.625 per cent, payable semi-annually.
The bank said it met all scheduled interest payments throughout the lifespan of the instrument before fulfilling its final repayment obligation, covering the principal and accrued interest in full.
According to the bank, the redemption was financed through internally generated liquidity as part of its forward-looking liquidity management strategy.
It explained that a dedicated sinking fund was established to make gradual provisions for the maturity, allowing it to meet the repayment obligation without disrupting normal business operations or compromising compliance with applicable regulatory liquidity requirements.
Commenting on the development, the Managing Director and Chief Executive Officer of Fidelity Bank Plc, Dr Nneka Onyeali-Ikpe, said the successful redemption reflected the bank’s disciplined financial management and commitment to honouring its obligations to investors and other stakeholders.
She said the bank had anticipated the maturity from the outset and put the necessary measures in place to ensure a seamless repayment.
“This successful redemption demonstrates the strength of our franchise, the discipline of our balance sheet management and our commitment to honouring our obligations to investors and other stakeholders. We anticipated this maturity from the outset and planned accordingly, which reflects our commitment to responsible financial management,” Onyeali-Ikpe said.
The repayment marks another milestone in the bank’s participation in the international debt capital markets, where it has raised funds through three Eurobond transactions.
The 2021 issuance was its third Eurobond offering, following earlier transactions in 2013 and 2017, through which the bank raised $300 million and $400 million respectively.
Investor demand for the 2021 offering was strong, with orders exceeding $700 million, significantly surpassing the $400 million issued. The level of subscription reflected investor interest in the bank’s international debt offering.
The latest redemption also comes after Fidelity Bank completed its recapitalisation programme ahead of the regulatory deadline, strengthening its capacity to sustain operations and pursue growth opportunities.
The bank’s capital-raising efforts increased its eligible regulatory capital to approximately ₦533 billion, above the ₦500 billion minimum capital requirement for banks with international authorisation.
The recapitalisation milestone, combined with the full repayment of the Eurobond, underscores the bank’s efforts to maintain a strong capital base, manage liquidity prudently and meet its financial commitments.
The redemption is also expected to reinforce investor confidence in the bank’s financial management and its ability to manage external debt obligations while pursuing its strategic objectives in Nigeria and international markets.
By funding the repayment from internally generated liquidity and providing for the maturity through a dedicated sinking fund, Fidelity Bank demonstrated an approach to debt management designed to minimise pressure on its operations when major obligations fall due.
The development further highlights the importance of forward planning and adequate liquidity management for financial institutions accessing international capital markets, particularly as they balance debt servicing, regulatory capital requirements and the financing of future growth.
