Sterling Bank Plc yesterday listed its N32.9 billion bond on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange, paving the way for investors in the bond to trade on their units.
The N32.90 billion Series 2 bond, issued by Sterling Investment Management SPV Plc, a special purpose vehicle of the bank, is an unsecured bond with a tenor of seven years at a fixed coupon rate of 16.50 per cent. The bond is part of a N65 billion debt issuance programme launched by Sterling Bank to support its new business strategy and digital banking.
Under the new business strategy, Sterling Bank will build expertise and investments in five sectors regarded as growth sectors of the Nigerian economy including health, education, agriculture, renewable energy and transportation.
Speaking during the listing at the NSE and FMDQ, Managing Director, Sterling Bank Plc, Mr. Abubakar Suleiman, said the success of the bond reflected the increasing appetite of local institutional investors for long term debt instruments and increasing confidence in Sterling Bank as an issuer.
According to him, the considerable oversubscription of the issue showed investors’ confidence in the bank and further strengthened and diversified the bank’s corporate funding strategy.
He commended stockbrokers for supporting the bank and assured that the bank will continue to engage the market on its activities.
He urged capital market operators to continue to support the bank as it continues to explore opportunities to widen its businesses and strengthen is balance sheet.
Associate Executive Director, Capital Markets, FMDQ OTC Securities Exchange, Ms. Tumi Sekoni commended Sterling Bank for again joining the league of corporate entities whose debt profiles have been raised through the value-packed listings, quotations and noting service offered by FMDQ. Sterling Bank had listed its earlier bond on FMDQ.
She noted that the listing would contribute to the growth of the Nigerian corporate bond market by injecting renewed confidence into the debt market.
She assured stakeholders that FMDQ would continue to innovate and provide efficient services, as may be necessary, to support issuers and investors, towards achieving a globally competitive and operationally excellent debt market.
Partner and Head of Investment Banking, Constant Capital Partners Limited, Mr. Niyi Omojola noted that his firm, the lead issuing house in the bond issue, crafted a unique and innovative investment structure which enabled the Sterling SPV bond share in the same investment grade rating as Sterling Bank Plc, thereby enlarging the range of potential investors in the bond.
He said the innovative structure protects investors by providing bond-backed credit enhancement while investing in the Tier II capital of Sterling Bank Plc.
According to him, as a result of the compelling proposition offered by Sterling Bank Plc and the structuring and distribution efforts of Constant Capital, the transaction was extensively oversubscribed.
Omojola also said the innovation has allowed investors benefit from an enhanced rating, while providing Tier II capital to Sterling Bank Plc.
Associate Executive Director, Corporate Development, FMDQ OTC Securities Exchange, Ms. Kaodi Ugoji, said listing on FMDQ will avail the bond unprecedented market transparency, unrivalled information disclosure, efficient price formation and improved global visibility, among other benefits.
She reiterated FMDQ’s commitment to continually align its initiatives towards serving and providing the much-needed support to the players in the DCM.