First Bank to Redeem $300m Debt Notes

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By Dipo Olowookere

Plans are being made by the management of First Bank Nigeria Limited, the subsidiary of FBN Holdings Plc, to redeem its 8.25 percent $300 million notes raised from the international debt market before the due date in August 2020.

A statement issued by the firm disclosed that that it was exercising its option to redeem the fixed rate subordinated notes held by FBN Finance Company B.V.

First Bank established a track record in the market by issuing a $175 million Tier-II Eurobond in 2007, which was recalled in 2012.

In August 2003, the lender issued a $300 million Eurobond following an investor roadshow in the United Kingdom and the United States.

This was part of the financial institution’s desire to tap into the global capital markets for a seven-year callable subordinated instrument with a yield guidance of 8.5 percent.

The note, which is callable after five years and is expected to be rated B by rating firm Standard and Poor’s S&P and B- by Fitch, while First Bank was currently rated at BB- by S&P; and B+ by Fitch.

In the notice to the Nigerian Stock Exchange (NSE) dated July 6, 2018, FBN Holdings said, “The bank seeks to call and pre-pay holders of the notes at the next callable date of August 7, 2018.”

It explained that, “This liquidity management exercise demonstrates the strength of the bank’s currency liquidity and robust capital base, while further enhancing the efficiency of the balance sheet.”

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