FirstBank To Call $300m 8.25% Int’l Capital Market Debt Notes

The board of FBN Holdings Plc, on Friday said First Bank of Nigeria Limited, its largest subsidiary, plans to exercise its option to call the $300m 8.25% subordinated notes raised from the international debt markets before the due date of August 2020.

In the notice dated July 6, 2018, signed by Seye Kosoko, its company secretary, the FBN Holdings said FirstBank, seeks to call and pre-pay holders of the note at the next callable date of August 7, 2018.

The bank, he said, took the decision as a liquidity management exercise, just as it demonstrates the strength of FirstBank’s foreign currency liquidity and robust capital base, while further enhancing the efficiency of the balance sheet.

The notes are held by FBN Finance Company B.V and will exercise its option to call the $300m notes.

The bank had in August 2003 issued a $300 m Eurobond following an investor roadshow in the UK and US as it sought to tap the global capital markets for a seven-year callable subordinated instrument with a yield guidance of 8.5%.

According to information available on the note, it 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.

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

The note paid a coupon of 9.75% for the first five years and was theoretically expected to pay 3Month London Interbank Offer rate LIBOR plus 6.54%.

Other factors that were expected to support the Eurobond sale included the fact that other domestic banks are natural buyers of Nigerian corporate Eurobonds as they need to balance their dollar assets and liabilities.

https://investdata.com.ng/2018/07/firstbank-call-300m-8-25-intl-capital-market-debt-notes/