NOVA Merchant Bank says its N10bn bond oversubscribed by 300 per cent

NOVA Merchant Bank, a leading merchant bank in Nigeria, has announced the successful issuance of its N10 billion seven-year subordinated unsecured bond under its N50 billion debt issuance programme.

The transaction is NOVA’s first bond issuance in the debt market and was oversubscribed by 300 percent.

The offer which opened on June 30, 2020 following relevant approval from the Securities and  Exchange Commission(SEC) and the Central Bank of Nigeria (CBN), closed on July 8, 2020 with a bond yield guidance of 12 percent to 12.50 percent.

In a statement, the bank said 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.

Meanwhile, the lead issuing house, United Capital Plc, has described the transaction as unprecedented while the joint issuing houses Stanbic IBTC Capital, UCML Capital Limited, Emerging Africa and Greenwich Trust Limited also described it as a remarkable deal.

It 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.

Commenting on the development, the Chairman of NOVA Merchant Bank, Mr. Phillips Oduoza said he was excited about  the success of the company’s debut issue, saying it has placed 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 said in the statement emailed to Persecondnews.

Oduoza said  the bank was well positioned to fulfil its promise of focusing on providing long-term funding which is critical to the economic development of the country.

On his part, the Managing Director, Mr 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.”