Wema Bank seeks Investors for N25bn Bonds to boost SME Business

Wema Bank is seeking for investors to raise a N25 billion debt needed to boost its Small and Medium Enterprise (SME) business, which as of 2021 made up less than 2 per cent of its capital.

The bank said in a Tuesday regulatory filing that “The Bonds are being issued privately to targeted investors and will not be listed on any Security Exchange.”

According to the bank document, the fund will similarly help spur growth in the lender’s loan book for its retail and commercial banking operations and strengthen its digitalisation push.

“Subscription to the perpetual bond, so named for the reason that it carries no maturity date unlike most bonds, is N1 billion at a minimum, with the interest rate set at 16 per cent.

“The security is planned to be in denominations of N1,000, while issuance is expected to be dematerialised under a trust deed,” the document said.

Typically irredeemable, bonds of this nature are usually regarded as equity in a different shape.

Wema Bank has stated that the tenor of the instrument will run as long as the bank itself lasts.

However, the lender said it could call the bond if it so decides after a minimum notice of 20 days to such creditors and the bonds trustee, and 60 days at most “subject to the relevant regulatory approvals.”