First Bank Pays Holders of $450m Bonds Due 2021

By Modupe Gbadeyanka

Financial powerhouse, FBN Holdings Plc, has announced the redemption of the bonds one of its subsidiaries, First Bank of Nigeria Limited, issued to investors five years ago.

In a disclosure to the Nigerian Stock Exchange (NSE) today, it was stated holders of the debt instruments were paid the amount they bought in 2014.

In 2014, the financial institution issued notes worth $450 million to investors at a coupon rate of 8 percent, with maturity at 2021.

“First Bank of Nigeria Limited, the largest subsidiary of FBN Holdings Plc today, Tuesday, July 23, 2019, called the $450 million 8 percent notes due July 2021, earlier issued to investors in 2014, though FBN Finance Company B.V,” the notice issued by FBN Holdings on Tuesday said.

According to the disclosure, “the redemption of these notes was endorsed by the Central Bank of Nigeria (CBN) and done at par from the bank’s internal FCY liquidity, without financing.”

It further noted that the early payment of the $450 million bonds “is testament of the strength and exceptional funding capability of the bank.”

Business Post reports that the bank raised the Tier II capital of $450 million Eurobond in July 2014 to support its capital level and business growth.

Last month, First Bank had announced its intention to redeem the $450 million notes two years before its maturity, exercising its rights to redeem them before due date.

“First Bank of Nigeria, the largest subsidiary of FBN Holdings Plc intends to exercise its option to redeem the fixed rate subordinate note held ny FBN Finance Company B.V.

“Accordingly, FBN Finance Company B.V. will exercise its option to call the $450 million 8.00 percent subordinate notes, raised from the international markets, due in July 2021.

“The bank seeks to call and pre-pay holders of the note at the next call date of July 23, 2019,” a statement from the company had said, noting that, “This liquidity management exercise demonstrates the strength of the bank’s foreign currency liquidity and robust capital base, while further enhancing the efficiency of the balance sheet.”