Zenith Bank Gets Offers to Buy Back $392.6m Eurobonds

By Dipo Olowookere

On Wednesday, September 4, 2019, Zenith Bank announced its intention to repurchase the $500 million worth of Eurobonds it sold to some foreign investors in 2017.

The lender had said holders of the five-year debt instrument due for maturity in 2022 were free to tender them up till 5pm London Time of Wednesday, September 11, 2019, with a promise from the bank that results would be announced the next day.

In a notice to the Nigerian Stock Exchange (NSE) on Thursday, September 12, 2019, the financial institution said it received valid tender for the purchase of $392.6 billion in aggregate principal amount of notes pursuant to the tender offer.

Zenith Bank explained that, “This amount includes notes tender using the guaranteed delivery procedures as set out in the tender offer memorandum and subject to the guaranteed delivery deadline on September 13, 2019.”

“The company hereby announces that, in accordance with the tender offer memorandum, it intends to accept for purchase such notes validly tendered,” the statement added.

Continuing, the lender said, “Subject to the minimum denomination, the company will pay for the notes accepted by it for purchase pursuant to the tender offer a price in cash equal to $1,085 per $1,000 in principal amount of the notes plus the accrued interest amount.”

“The purchase price and the accrued interest amount will be paid on the payment date, expected to be on or about September 16, 2019,” it concluded.

Business Post reports that in 2017, when Zenith Bank issued the five-year senior unsecured benchmark bond listed on the Irish Stock Exchange, it was at a coupon rate of 7.375 percent and it recorded oversubscription of more than 300 percent.

It is believed that the tier-one lender was recalling the $500 million Eurobond on the back of a strong Dollar liquidity in its buffers as well as fears of a possible devaluation of Naira by the Central Bank of Nigeria (CBN), which could raise its obligations in local currency.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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