Union Bank May Issue Up To $250m Eurobond- Sources

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Encouraged by the success of its $163m share sale in the 2017Q4 to boost lending, and the Federal Government’s $2.5bn Eurobond sale in February, Union Bank of Nigeria is working with Citigroup and Renaissance Capital on a planned Eurobond sale, two banking sources told Reuters.

The $2.5bn Eurobond is for refinancing local currency bonds at lower cost, just as there are plans for a further $2.8bn this year.
Union Bank and Renaissance Capital declined to comment, while a Citi representative was unable to make immediate comment.
Sources say Union Bank, which is 22.1% owned by Atlas Mara, could issue up to $250m in bonds including one in local currency and plans to utilize lending opportunities in the agribusinesses sector.
Nigerian banks are gearing up to tap Eurobonds to boost lending and to refinance existing dollar debts before interest rates begin to rise further in the United States.

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.
The central Bank of Nigeria (CBN), this year, put a restriction on dividend payments for lenders with high non-performing loans and capital ratios lower than its minimum requirement.

Banking sources said that rival lenders could follow Union Bank’s lead. FCMB is considering a Eurobond and Diamond Bank, with an existing $200 million Eurobond due next year, could tap markets again, sources say.
Fidelity Bank issued a $400 million Eurobond in October at 10.75 percent to refinance existing debt and boost lending. The mid-tier bank told Reuters it used the bond proceeds to fund its trade book in the fourth quarter.

An FCMB spokesman said the bank was open to raising funds in the future but details have not been worked out. A Diamond Bank official said investors would be informed on any decision to raise fresh capital.

 http://investdata.com.ng/2018/03/union-bank-may-issue-250m-eurobond-sources/

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