By Dipo Olowookere
One of the oldest banks in Nigeria, Union Bank Plc, may likely issue Eurobond worth $250 million this year to refinance some debts.
Relying on “banking sources,” Reuters said the lender was working with Citigroup and Renaissance Capital to achieve this goal.
Atlas Mara owns a 22.1 percent stake in Union Bank, which plans to tap opportunities to lend to agribusinesses.
Last month, the Nigerian government floated its $2.5 billion Eurobond to refinance some local debts and with the Central Bank of Nigeria (CBN) directing banks with huge loans and low capital base not to pay dividends to shareholders, the sale of Eurobonds may be an escape route for the mid-tier financial institutions.
Reuters said sources in the banking sector disclosed to it that Union Bank of Nigeria, a tier two lender, could have its rivals also consider issuing Eurobond soon.
In October 2017, Fidelity Bank issued a $400 million Eurobond at 10.75 percent to refinance existing debt and boost lending.
“FCMB is considering a Eurobond and Diamond Bank, with an existing $200 million Eurobond due next year, could tap markets again,” the report said.
But in an interview last month, the chief executive of Diamond Bank, Mr Uzoma Dozie, told Daily Trust that the bank has no plan to raise fresh capital, but rather close some of its operations in other countries to save cost and focus more on digital banking operations.
The race for more capital has also been fuelled by stricter accounting principles on how lenders recognise losses, which are likely to knock 50-200 basis points off industry capital, banking executives have said.
Meanwhile, Union Bank and Renaissance Capital declined to comment, while a Citi representative was unable to make immediate comment.
Modupe Gbadeyanka 
Aduragbemi Omiyale