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FCMB, HSBC sign $100m structured debt deal


April 04, 2007/Punch




HSBC Bank Plc has successfully executed a privately placed, non-secured structured debt instrument totalling $100m with First City Monument Bank Plc.


It was learnt that the facility was part of a deliberate strategy by FCMB to fund ambitious growth plans in Nigeria through a combination of international debt and equity offerings.


In addition, the bank expects to raise over $1bn in medium-to-long-term funding over the next 18 months.


According to the partners in the deal, this is the first agreement of its kind with an African bank in the international capital markets.


The representative of HSBC at the agreement signing event, Mr. Zain Latif, said, “HSBC is delighted to have been involved in this landmark and innovative transaction with FCMB. This deal allows FCMB to enter the international capital markets with a bespoke financing structure.


We look forward to working with FCMB as it embarks on its ambitious growth strategy for Nigeria and the broader region.”


A top official of the bank told our correspondent on Wednesday that FCMB planned to use the facility for project financing in the real estate and energy sectors, as well as to focus on the expansion of consumer lending.


“With FCMB’s recent focus on retail finance, a new growth trajectory has been created, making it one of the fastest growing banks in Nigeria in terms of assets, deposits, profitability and customer acquisition,” he said.


Following the agreement, FCMB plans to further establish itself as a strong contender in the international market.


The bank’s Managing Director, Mr. Ladi Balogun, explained, “This agreement with HSBC demonstrates a high level of confidence in FCMB by the global investment community, and an understanding of the growth potential we can achieve. We can now further expand our offering in the Nigerian and African markets”.


In the last financial year, FCMB signed long-term agreements totalling $175m with international investors, including Helios Investment Partners LLP and Soros Capital.


The clear demonstration of the global investment community’s support and confidence in FCMB and its aggressive growth strategy is expected to ensure that the bank builds strong relationships with the established parties.


This will allow them to channel further portfolio investments into the Nigerian economy, focusing particularly in the bonds, structured debt, real estate, mortgage-backed securities and equity markets.

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