Capital Raise: Wema Bank Sells Bond At 16% To Private Investors

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Wema BankWema Bank Plc has announced the issuance of N25 billion perpetual fixed rate non-resettable additional subordinated note at 16 percent, the Tier-2 lender said in a regulatory filing submitted to the Nigeria Exchange (NGX).

In a statement, the Bank proposed the issuance of bonds with loss absorption features totaling about N25 billion to targeted investors. Wema bank said the bonds are being issued privately to targeted investors and will not be listed on any Security Exchange.

“Wema Bank Plc decided on the issuance of the bond as a means of shoring up its capital base to facilitate the bank’s business of lending to the Nigerian Small and Medium Enterprise (SME) businesses alongside deepening the bank’s loan portfolio in the retail and commercial lending space.

“In addition, the Additional Tier 1 bonds issuance would aid the bank in its digital dominance goal through improvements in our information technology infrastructures”, management told the Nigerian Exchange.

It explained that the bonds will be issued in a dematerialized form under a trust deed in denominations of N1,000 with a minimum acceptable subscription of N1,000,000,000 with an interest rate of 16%.

The bank further stated that the bonds are perpetual in nature – with maturity linked to the corporate duration of Wema Bank Plc as a going concern- and may be called by the issuer at its sole option and after giving a minimum of 20 days and a maximum of 60 days to the Bondholders and Bonds Trustee subject to the relevant regulatory approvals.

Parties to the transaction include Greenwich Merchant Bank Limited, Aluko & Oyebode, Olaniwun Ajayi LLP, United Capital Trustees, United Bank of Africa Plc, Greenwich Registrars and Data Solutions, KPMG Professional Services.

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