More banks search for bondLliquidity on OTC Platform

…as Stanbic IBTC Bank lists N15.54bn bond on FMDQ platform

More Nigerian banks are rooting for bond liquidity on the Over-The-Counter (OTC) platform with the latest beingthe listing of Stanbic IBTBank plc 15.54bn Series 1(Tranches A & B) 10-Year Subordinated Notes under a 150bn Structured Note Programme due in 2024.

Stanbic IBTC Bank bond listing follows the pioneer listing of the N30.5bn United Bank for Africa Bond on FMDQ OTC securities exchange.

Bola Onadele Koko, MD/ CEO of FMDQ said the debtfocused securities exchange is committed to facilitating growth and development in the financial market through its efficient platform for the registration, listing, quotation and valuation of bonds.

He further highlighted that listing of debt securities on FMDQ provides a wide range of benefits across the debt market value chain to include global visibility and transparency to the listed debts, improved secondary market liquidity, price formation and benchmark pricing, positively impacting the Nigerian debt capital market (DCM) stakeholders i.e. issuers, issuing houses, investors, market makers and regulators, and resulting in a more globally competitive capital market.

As Nigeria’s foremost debt capital securities exchange, FMDQ recognises the growth potentials of issuers of debt in the Nigerian capital market and thus provides them with a remarkable opportunity to raise the profile of their issues and access a deep pool of capital.

FMDQ remains unwavering in its continuous provision and disclosure of pertinent information on debt issues listed on its platform; These information include, amongst others, issue size, tenor, issue and maturity date, coupon, yield, issuer ratings, shelf prospectus, pricing supplement and
issuer issue history.

An efficient, transparent and well regulated market, which FMDQ promotes, will attract and retain investors (domestic and foreign). Issuers
have the opportunity to leverage on the provisions of this unique exchange to meet their long term funding needs, thus further developing the Nigerian financial market, and by extension, the Nigerian economy. Yinka Sanni, CEO, Stanbic IBTC Bank, who spoke on
the sideline of the event said,the bond listing is significant

“ The need for the capital is to enhance our capital base because the bond qualifies us as a Tier II capital bank, it is a ten year bond.” he added: “We are delighted of the success of bond raised and we believed that listing the bond on FMDQn exchange is very significant as it gives us the privilege to join this very reputable and growing exchange in the country. We are attracted to this exchange particularly because of the strength the exchange

offers. The exchange in a transparent manner offers the bond price at market determine. This exchange is very liquid. To join the legend of other top companies that are listed on the exchange.” Sanni noted further, “Stanbic IBTC bank is involve in two lines of business, the first part of our business is personal and business banking, known as retail banking, while the other is corporate and transactional banking.

Over the years, we are aware that the legacy institution tom Stanbic IBTC Plc was called Investment Banking and Trust Limited, the company was founded in 1989 and over the years the company has changed such that in 2005, it became IBTC charter Bank and in 2007, it became Stanbic IBTC. Over the years we have seen great growth, transformation and what that entail was that we have seen an increase in the number of clients. At the moment we are present in 180 locations in nationwide, present in every state of Nigeria. We have over a million client, retail bank business still growing.

Our leading business is investment banking, stockbroking, asset management will continue to grow.”

“Listing on FMDQ is significant that will help the market develop, we provide instrument that can trade on the platform. We are raising sufficient funds for our immediate growth, its a market that investors can access whenever they want. We expect to deliver decent returns to investors. The management of the FMDQ OTC have been given charge by their board to ensure that the instrument listed on them remains liquid, they have market development practices and processes that ensure that the exchange is transparent and attractive to buyers and sellers”, Sanni added.

Ahead of the unveiling of the FMDQ Bond Listing Scroll, presentation of the FMDQ Bond Listing Plaque to the Issuer, and autographing of the FMDQ Bond Listing Wall of Fame, Sanni noted that the Stanbic IBTC Bond is the second corporate bond to be listed on FMDQ’s platform and that Stanbic IBTC Bank PLC is pleased to achieve this milestone and contribute to the deepening of the Nigerian debt capital markets.

He explained that the N15.54 billion bond issue was the first series issued under Stanbic IBTC’s Structured Note Programme and comprised of two tranches of fixed and floating rate notes.

The bonds have a tenor of 10 years and are notable for being the longest tenured bonds in its asset class to be issued in the Nigerian Capital Markets.

Net proceeds of the issue was applied to fund the Bank’s asset growth in the personal and business banking segment, whilst shoring up capital adequacy in the form of Tier II Capital, in line with Central Bank of Nigeria’s regulatory framework.

He further highlighted that the bonds are listed on FMDQ as the exchange provides a dedicated over-the- counter platform, which serves to enhance the liquidity of bonds and other securities traded on it.

He concluded, by noting that growth in secondary market liquidity will contribute immensely to the growth in the overall domestic bond market, therefore FMDQ’s value proposition for the transformation of our markets, will help deepen secondary market liquidity and transparency, thus further aligning our market with international best practices.

The issuer, issuing house/sponsor and FMDQ, represented by the Vice-Chairman, FMDQ OTC PLC & Member, Board Listings and Quotations Committee, Jibril Aku alongside Onadele signed the FMDQ Bond Listing Register.

The Bond Listing Certificate was also presented to the issuer. Bentsi-Enchill representing Stanbic IBTC Capital Ltd., the sponsor of the bond on FMDQ’s platform, purported that the listing of the bond on FMDQ OTC securities exchange is expected to promote secondary market liquidity, thus providing a pricing benchmark for subsequent issuances under the Stanbic IBTC Structured Note Programme.

The Programme is the first of its kind to be established in the Nigerian capital markets, as it allows for the issuance of different types of bonds for purposes of the issuer’s funding and liquidity management, regulatory capital management (Tier 2 Capital) and distribution of risk assets viacredit linked notes.

IHEANYI NWACHUKWU