Business

Wema Bank issues N25bn 16% perpetual fixed rate Tier 1 subordinated bonds

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2 years ago

By Chima Nwokoji | Lagos

Wema Bank is proposing the issuance of Perpetual Fixed Rate Non-Resettable Additional Tier 1 Subordinated Bonds (hereinafter referred to as “the bonds”) with loss absorption features, totaling about N25 billion to targeted investors.

Information from the Nigerian Exchange showed that the bonds are being issued privately to targeted investors and will not be listed on any security exchange.

Wema Bank Plc decided on the bonds issuance 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 bank said the Additional Tier 1 bonds issuance would aid the bank in its digital dominance goal through improvements in information technology infrastructures.

The bonds will be issued in a dematerialised form under a trust deed in denominations of N1,000.00 with a minimum acceptable subscription of N1 billion with an interest rate of 16 percent.

Furthermore, 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.

This is 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.

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 are professional parties to the bond issuance.

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