Interswitch Lists ₦23billion Bond on the NSE, Instead of its Much Awaited IPO

E-payment giants, Interswitch have announced the listing of ₦23billion Bond on the Nigerian Stock Exchange (NSE), instead of its expected Initial Public Offering (IPO).

The bond, which is an issued debt with the agreement to pay a fixed interest rate of 15% will run for a tenure of 7 years.

The Callable Senior Unsecured Bond is part of an N30 billion Debt Issuance Programme issued through a Special Purpose Vehicle, Interswitch Africa One Plc.

Speaking on the listing the Group Managing Director/Founder Interswitch Limited, Mr Mitchell Elegbe, expressed delight on the company’s capital raising efforts.

“We are delighted with the outcome of our capital raising efforts. We have evolved over the past 17 years into a technology unicorn focused on providing digital solutions to customers in Nigeria and across Africa. We, therefore, see this listing as the first step in a new phase of our journey and we are determined to keep going.”

Mr Mitchell Elegbe, the Group Managing Director/Founder Interswitch Limited

However, investor participation was restricted to qualified institutional investors as defined by the SEC in Nigeria. 64% of the proposed Bonds was allocated to pension fund managers, 7% to asset managers and 22% to commercial banks.

Interswitch is a leading technology-driven company with a focus on the digitization of payments for its over 32 million consumers in Nigeria and other African countries.

Initially, the company was set to raise over $1 billion from a dual listing on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE) in 2016 but was aborted due to the economic decline suffered in Nigeria.

However, last year Bloomberg reported that the E-payments giants have reignited its listing plans, recruiting JPMorgan Chase & Co, financial advisers, and Standard Bank Group as firms to work on the potential initial public offering.

In October 2019, the company announced raising ₦23 billion ($63.3 million) in debt-financing, via bond placement with the Securities and Exchange Commission of Nigeria (SEC).

Also, the company received a huge financial boost of $200 million from Visa in return for a 20% stake. An investment which effectively increased Interswitch valuation to no less than $1 billion, confirming its unicorn status.

Beyond an increase in funds, the Visa investment and the recent bond listing would increase investor confidence if the company finally becomes public.

With Interswitch new bond listing in the NSE, it is unclear if the company still plan on going forward with the expected IPO or would be opting for bond listing as an alternative.