Six investors corner 81% of LAPO Micro Finance Bank’s N4.46 billion bond  

LAPO MFB SPV Plc, a special purpose vehicle wholly owned by LAPO Microfinance Bank Limited, has successfully raised N4,458,643,000 ($2.9 million) from its Series 1 Senior Unsecured Fixed Rate Bond, with six investors accounting for 81% of total successful subscriptions.

The formal allotment data cleared by the Securities and Exchange Commission (SEC) shows the book-build offer recorded 100% subscription with 31 applications and zero rejection.

The bond carrying a coupon of 20.00% per annum with a 5-year tenor due 2031 was offered to qualified institutional investors and high net worth individuals under LAPO MFB SPV’s N30 billion bond issuance programme.

Despite 31 applications and a fully subscribed book, the bulk of the debut Series 1 bond landed in the hands of a small cluster of high-ticket investors. All 31 applications were eligible at the market-clearing price and were accepted in full.

What the data is saying

The allotment data shows that the 31 investors who participated did not do so in equal measure:

• Just two investors — those in the 500,001–1,000,000 units range — collectively took up N2 billion, representing 44.86% of the entire bond.
• At equal split, each of these investors deployed approximately N1 billion into the paper.
• Another four investors in the 100,001–500,000 units range absorbed an additional N1.6 billion, accounting for 35.89% of the offer.
• Combined, these six investors alone accounted for approximately N3.6 billion or 80.75% of the total N4.46 billion raised.

The remaining 25 investors — spread across four lower subscription bands — shared just N855.6 million or roughly 19.25% of the deal.

Of those 25, the smallest group — three investors in the 1–1,000 units range — put in a combined N3 million, a figure that rounds to noise against the total.

More insights

The structure of the deal suggests offerings that are technically “open” to a range of qualified investors but are in practice anchored by a handful of deep-pocketed institutions or ultra-high-net-worth individuals.

• The average ticket across all 31 investors works out to approximately N143.8 million — but that average is heavily skewed by the top-end participants.
• Strip out the six largest investors and the average ticket for the remaining 25 falls to just N34.2 million, a figure that reflects a much thinner participation base than the headline subscription rate suggests.
• The 20.00% fixed coupon, priced at a time when the CBN’s monetary policy rate (MPR) stands at 27.50% and secondary market NTB yields hover in the 18–22% range depending on tenor, positions the bond as market-rate paper.

For the two largest investors writing N1 billion tickets each at 20% fixed for five years, the effective annual income runs to N200 million apiece — a steady, senior-ranking stream from a microfinance institution with a well-established retail lending footprint.

What you should know

LAPO Microfinance Bank Limited is one of Nigeria’s largest microfinance banks by loan portfolio, with a focus on group-based lending to low-income women and micro-entrepreneurs. In March, the micro lender launched a similar bond offer of about N10 billion.

The SPV structure allows it to raise capital markets funding independently of its banking licence balance sheet constraints.

The bond is designated “senior unsecured,” meaning bondholders rank ahead of equity but behind secured creditors in a wind-up scenario — a relevant risk consideration for a microfinance lender whose loan book is exposed to lower-income obligors.

The N30 billion programme ceiling means LAPO MFB SPV has only deployed N4.46 billion — approximately 14.9% of its total programme capacity — in this first series, leaving significant headroom for future tranches if market conditions remain accommodating.

FirstCap served as lead issuing house and bookrunner, with Anchoria Advisory Services, AVA Capital PLC, Quantum Zenith, and RMB acting as joint bookrunners.

Bonds will be credited to registered depository accounts of successful subscribers through CardinalStone Registrars Limited following SEC clearance of the allotment, which has already been obtained.