FCMB Secures N26 Billion with 16% Annual Interest Rate in Successful Bond Raise

FCMB Group Plc has successfully concluded a noteworthy bond issuance, raising a substantial N26 billion in a move that reverberates across the Nigerian financial landscape.

Part of the Group’s larger N300 billion Debt Issuance Programme, this Series 2 Bond is officially known as the Perpetual 16% Fixed Rate Resettable NC5.25 Additional Tier I Subordinated Bonds. The issuance garnered widespread interest from a diverse array of investors, including corporate entities, financial institutions, trustees, and high-net-worth individuals.

Issued at a fixed rate of 16.0% per annum, this bond mirrors prevailing market trends and underscores the confidence investors place in the Group’s financial strategy. Against the backdrop of Nigeria’s inflation rate, which stood at 26.72% in September, and an average 12-month rate of around 22%, the successful issuance attests to the resilience of FCMB’s financial instruments.

This Series 2 Bond aligns seamlessly with the objectives set by the Central Bank of Nigeria, as it contributes to fortifying the capital base of Nigerian banks. The infusion of funds resulting from this issuance is earmarked for FCMB’s banking subsidiary, First City Monument Bank Limited (“FCMB”). The injection is expected to enhance the bank’s capabilities and fortify its position in pursuing long-term objectives.

Undoubtedly, this issuance marks a strategic milestone for FCMB Group, exemplifying its commitment to securing additional capital to propel its operations and achieve its long-term strategic goals. The successful execution of this financial move positions FCMB Group favorably in the dynamic landscape of the Nigerian financial sector.

The intricacies of this financial maneuver were skillfully navigated with the assistance of Chapel Hill Denham Advisory Limited and FCMB Capital Markets Limited, both acting as the Issuing Houses for the bond. Their collaborative efforts played a pivotal role in ensuring the smooth and successful execution of this strategic financial initiative.

The Series 2 Bond issuance represents more than just a financial transaction; it symbolizes FCMB Group’s proactive approach to adapt to market dynamics and capitalize on emerging opportunities. By tapping into diverse investor segments, FCMB has not only strengthened its financial position but has also demonstrated its ability to attract interest from various stakeholders in the financial ecosystem.

In the broader context, this move is in harmony with the evolving landscape of the Nigerian financial market. The bond issuance, with its focus on shoring up the capital base, aligns with regulatory objectives set by the Central Bank of Nigeria. The central bank’s emphasis on bolstering the financial strength of Nigerian banks is integral to maintaining stability and fostering growth in the financial sector.

The infusion of N26 billion from the bond issuance into FCMB’s banking subsidiary, FCMB, is poised to have a transformative impact. It is expected to provide the necessary impetus for the bank to pursue and achieve its long-term objectives. Whether in expanding its market presence, enhancing technological capabilities, or facilitating strategic investments, this injection of funds is a strategic enabler for FCMB’s growth trajectory.

Chapel Hill Denham Advisory Limited and FCMB Capital Markets Limited played instrumental roles as the Issuing Houses. Their expertise in navigating the intricacies of bond issuances ensured that the process was not only efficient but also aligned with regulatory standards. The collaboration between these entities exemplifies the synergy required for successful financial operations in today’s complex economic landscape.

Beyond the financial implications, the successful completion of this bond issuance reflects positively on the overall market sentiment. The fact that FCMB Group was able to attract investments from a diverse range of stakeholders speaks volumes about the confidence the market has in the Group’s financial health and strategic direction.

In conclusion, FCMB Group’s N26 billion bond issuance stands as a testament to the resilience and adaptability of Nigerian financial institutions. In the face of economic dynamics and regulatory imperatives, FCMB has strategically positioned itself for sustained growth. The success of this issuance not only strengthens FCMB’s financial position but also contributes to the broader objectives of reinforcing the capital base of Nigerian banks. As the financial landscape continues to evolve, FCMB Group’s strategic initiatives underscore its commitment to staying at the forefront of positive change in the Nigerian financial sector.