NOVA Merchant Bank, on Monday, said its debut issuance of a N10bn seven-year Subordinated Unsecured Bond under its N50 billion debt issuance programme was oversubscribed by 300%.
The offer, which opened on June 30, 2020, following approval from the Securities & Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), closed on July 8, 2020 with a bond yield guidance of 12% to 12.5%.
“In spite of volatility in markets due to COVID-19 pandemic, the transaction was highly demanded with a diversified order book made up of discerning investors including asset managers, insurance companies, domestic pension funds, non-financial institution corporates, high networth individuals as well as international fund managers,” the bank said in a statement.
The lead issuing house, United Capital Plc, described the transaction as unprecedented, while the joint issuing houses Stanbic IBTC Capital, UCML Capital Limited, Emerging Africa and Greenwich Trust Limited described it as a remarkable deal.
This is one of the major corporate bond issuances by a Merchant Bank in Nigeria’s capital market, thus reflecting NOVA’s strong credit quality as well as the resilience of its business model despite current global challenges.
The statement quoted Chairman, NOVA Merchant Bank, Phillips Oduoza, as expressing excitement over the success of the debut issue as it places the Bank on a firm footing to achieve its short-term and long-term goals.
“The oversubscription of this bond offer is yet another significant milestone in the history of the bank and represents a vote of confidence by the investment community in the resilience of our business model. We will continue to march forward with confidence in the realisation of our strategic objectives,” he noted.
Oduoza added that the bank is well positioned to fulfil its promise to focus on providing long-term funding which is critical to the economic development of the country.
Also commenting, the Managing Director, Anya Duroha said, “the resounding success of this bond offer helps us achieve our goal to re-establish merchant banking as a key economic driver by providing long-term funds. It will also help us better meet the financing needs of our clients”.