capital market
Chapel Hill’s infrastructure debt fund raises N26.8bn
The newly listed Chapel Hill Denham Nigerian Infrastructure Debt Fund (NIDF) on Monday disclosed that it is raising N26.8billion series 9 offer a few days after listing on the Nigerian Exchange Limited (NGX).
The NIDF said the series 9 offer is for 246,182,408 units (nominal value of N100 each) issued at N108.89 per unit for an aggregating offer value of N26.8 billion.
In a regulatory filing, the NIDF said the fundraising is under the N200 billion Issuance Programme and is still open for subscription.
According to the NIDF, the offer was approved by the Securities & Exchange Commission and opened on September 19, 2023.
“The issuance represents the Fund’s ninth (9th) capital raise since inception in 2017 and the first since its Listing on NGX.
“The proceeds from the Offer will be applied towards infrastructure loans approved by the Fund Manager’s investment committee,” the NIDF said.
On October 5, NIDF’s 853,817,692 units were listed on the Main Board of NGX at N108.39 per share and will remit quarterly dividends to investors by paying out profits from investing in industries like power, transportation, healthcare and education.
With the listing, Chapel Hill’s NDIF became the first local currency-denominated infrastructure investment trust fund on its platform.
Through its listing on NGX, NIDF opens up the chance for investors to benefit from a diversified portfolio of asset backed loans across multiple sub-sectors and geographical spread, and listing on the NGX will further improve liquidity.
The NIDF is a N200 billion public infrastructure investment fund managed by Chapel Hill Denham.
The Chairman of NDIF, Phil Southwell during the fact behind the figures said the fund launched mid-2017 has generated 155 per cent returns.
“We have been fortunate enough not to have any non-performing loans (NPLs) and so it presents interesting risk returns for investors. In the UK market where I am originally from, 103 of the 350 stocks on the FTSE 350 are investment trusts and I look forward to being able to say the same thing about the NGX,” he said.
On his part, Chief Executive Officer, Chapel Hill Denham, Mr. Bolaji Balogun, said that NIDF has been Nigeria’s best performing fund over the last 5 years and has delivered significant impact and economic returns. He further stated that NIDF has achieved a market capitalization of N92.54 Billion, a freefloat of c.95%, and a remarkable record of zero non-performing loans from inception till date, a testament to an effective portfolio risk management strategy.
The Chief Executive Officer, NGX, Mr. Temi Popoola emphasised the commitment of the Exchange to infrastructural development and wealth creation in the country. He noted that the listing aligns with NGX’s mission to support financial market instruments that drive sustainable wealth creation and infrastructural advancement in Nigeria. According to Popoola, NGX will further enhance the visibility of NIDF, giving investors access to more investment options.
Investors in the Nigerian equities market ended the week with a N52 billion gain on Friday.
This followed an increase in the share price of Guinness, etranzact, and Unity bank amongst others on the trading floor today.
After five hours of trading at the capital market, the equity capitalisation increased to N56.527 trillion from N56.474 trillion posted by the bourse on Thursday.
Similarly, the All-Share Index (ASI) increased to 99,925.29 from 99,221.14 recorded the previous trading day.
The market breadth was positive as 31 stocks advanced, 17 declined, while 74 others remained unchanged in 7,302 deals.
Guinness, etranzact, and Unity Bank led other gainers with 9.95 percent, 9.89 percent and 9.84 percent growth in share price to close at N60.25, N5.00, and N1.34 from the previous N54.80, N4.55, and N1.22 per share.
On the flip side, Academy, CWG, and Prestige led other price decliners as they shed 9.85 percent, 9.40 percent, and 5.56 percent each to close at N1.83, N0.55, and N0.51 from the initial N2.03, N5.85, and N0.54 per share.
On the volume index, Sterlingng led trading with 42.259 million shares valued at N1.75 billion in 94 deals followed by Zenith bank which traded 28.033 million shares in 482 deals worth N1.008 billion.
Fidelity bank traded 25.104 million shares valued at N2.48 billion in 192 deals.
On the value index Zenith bank recorded the highest value for the day trading stocks worth N1.008 billion in 482 deals followed by GTCO which traded equities worth N635 million in 313 deals.
Seplat traded stocks worth N438 million in 72 deals.
Wema Bank says it has successfully concluded the first tranche of its recapitalisation exercise having secured all relevant regulatory approvals for the allotment of its N40 billion rights issue.
Its Managing Director, Mr Moruf Oseni, disclosed this in a statement made available on Friday in Lagos.
Oseni said as a forward-thinking and pioneering bank, the financial institution in December 2023 launched N40 billion rights issue which had been approved by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
CBN in March, launched a recapitalisation programme requiring commercial banks to raise fresh capital.
This is in alignment with the minimum requirement for their respective banking licenses within a 24-month timeline spanning April 1 to March 31, 2026.
The goal of recapitalisation is to simultaneously boost the Nigerian economy and strengthen its financial services industry.
Oseni said: “With this remarkable development, Wema Bank has now successfully raised the first tranche of its plan in the minimum requirement laid down by the CBN.
“The bank’s resolve in retaining its commercial banking license with National authorisation and the N40 billion rights issue is a step in that direction.
“Our move to commence our capital raise programme very early demonstrates our push for excellence, and with a strong emphasis on our digital play, we are set to amass more successes in the coming months,” he said.
The managing director expressed satisfaction with the vote of confidence given by the bank’s shareholders during its first rights issue exercise, noting that its shares were fully subscribed.
Oseni stated that the bank also obtained the approval of its shareholders at its 2023 annual general meeting to raise an additional N150 billion to meet the capitalisation threshold set by the CBN.
He hinted that the process was expected to be completed within 12-18 months.
Oseni said: “We are committed to providing optimum returns for every stakeholder and the successful conclusion of this N40 billion rights issue is a bold step in the right direction.
“In addition to the upward trend in the bank’s financial performance and the success recorded so far in its recapitalisation exercise, Wema Bank’s corporate rating was recently upgraded to BBB+ by Pan African credit rating agency, Agusto and Co.
“The bank was also retained at BBB by international rating agency, Fitch.”
According to him, over the medium to long term, Wema Bank is positioned to not only dominate the digital banking space but also the Nigerian financial services industry at large as it translates its industry leadership to significant market share.
Ecobank Transnational Incorpora ted (ETI) will raise $600 million through senior secured debts and tier-2 debts over the next year.
This was one of the resolutions from the group’s Annual General Meeting which took place in Lome, Togo on June 6, 2024.
In the notice containing the AGM resolutions, it was contained
“The General Meeting hereby authorises the board of directors to raise within a period of one year from the date of this meeting up to Six Hundred Million United States Dollars (US$600,000,000) in senior-ranked debt, Tier 2-qualifying subordinated debt or a combination of these forms of instruments as the board of directors may deem appropriate.”
Senior ranked debts are a type of debt that has priority over other debts in terms of claims on the assets of the issuer. This means that senior-ranked debt holders are paid before other creditors, such as subordinated debt holders.
Tier 2-qualifying subordinated debt is a type of subordinated debt that qualifies as Tier 2 capital under banking regulations.
It ranks below senior debt but above equity in the event of liquidation, meaning it is riskier than senior-ranked debt but less risky than equity. An example of tier-2 debts is the $350 million Tier-2 Sustainability Notes listed by ETI on the London Stock Exchange in 2021.
Recall that in April 2024, Ecobank Transnational successfully repaid a $500 million Eurobond which matured on April 18, 2024. The Eurobond, issued in April 2019, was listed on the London Stock Exchange with a coupon rate of 9.5 percent. This was the group’s inaugural Eurobond, however, its subsidiary, Ecobank Nigeria issued a dollar-denominated bond in 2014.
In 2014, Ecobank Nigeria issued its first ever dollar-denominated bond, a $200 million bond which was listed on the Irish Stock Exchange. The bank received advisory services from the African Export-Import Bank (Afrexim).
And there was an oversubscription on the bond offering.
Then in June 2021, Ecobank Transnational issued $350 million Tier 2 Sustainability Notes, which were listed on the London Stock Exchange. According to the group, these notes were oversubscribed by over 3.6 times, reaching a subscription of $1.3 billion. The notes which mature in June 2031, will pay an annual interest rate of 8.750% between June 2021 and June 2026. However, from June 2026, the interest rate will change to a new rate called “Reset Interest Rate”. It was noted in the group’s “Sustainable Finance Framework” that proceeds from the sustainable financing instruments such as the sustainability notes would be used to finance and/or refinance, in whole or in part, green and/or social projects.
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