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Tag: Eurobond

  • UBA redeems USD500 million 5-year Eurobond

    UBA redeems USD500 million 5-year Eurobond

    The United Bank for Africa (UBA) on Wednesday, redeemed its debut $500 million 5-year Eurobond notes with the maturity date of June 8, 2022.

    Issued in 2017, the five-year bond was offered at a coupon rate of 7.75%, and raised to support the Bank’s business in key sectors of the economy.

    As part of UBA’s liability management strategies, in November 2021, the bank repurchased $310.9 million of the notes through a cash tender offer. Upon maturity of the Eurobond, the outstanding portion of $189.1 million and the coupon of $7.3 million were redeemed by the bank.

    “The development is a testament to UBA’s robust and prudent liquidity management strategies, coupled with a very strong and diversified asset and liability management process. This, in spite of  macroeconomic headwinds underpinned by FX illiquidity, double-digit inflation and currency devaluation,” said Kennedy Uzoka, GMD/CEO of UBA.

    “Our huge customer base, diversified geographical spread and uncommon multiple decades of proven track record, continue to spotlight UBA as the preferred destination for investors, individuals and businesses alike,” Uzoka continued.

    With presence in 20 African countries, including Nigeria, as well established operations in France, the United Kingdom (UK) and the only sub-Saharan African bank with a deposit-taking licence in the United States of America (USA), UBA is a renowned financial institution providing banking and financial services to over 33 million customers across the globe.

  • Nigeria rules out Eurobonds sale, mulls local borrowing to fund 2019 budget

    The Debt Management Office (DMO) has disclosed that the Nigerian government will not consider going to the international debt market this year to borrow fresh funds.

    Director-General of the DMO, Ms Patience Oniha, who made this disclosure, stated that federal government will only consider the local debt market to seek for fresh funds.

    In a correspondence with Bloomberg, Ms Oniha said, “We will only raise the new domestic borrowing of N802.82 billion as provided in the 2019 appropriation act. We won’t be in the international capital market in 2019.

    Recall that in 2016, Nigeria approved a three-year plan to borrow more money from the international market and in 2018, the country issued a record $10.7 billion of international bonds.

    Some investors had expected the Africa’s largest economy, which went into recession in 2016 and exited a year later, to sell more papers in 2019 to cover the N2.5 trillion budget deficit.

    But Ms Oniha has dashed their hopes with her response to Bloomberg’s inquiry. She said federal government would stick to its new domestic borrowing plan to raise N802.8 billion this year.

    Eurobonds worth $10.87 billion as of June 2019 accounted for the largest percentage of the nation’s external debt, rising from $8.5 billion at the end of June 2018, according to data sourced from the debt office.

    The office had earlier this year refuted claims that the Federal Government had no plans to issue Eurobonds as part of its external borrowing this year.

    It noted that the 2019 Appropriation Act provided for new external borrowing of N824.82 billon (equivalent of $2.7 billion at USD/N305), adding that the plan for raising the new external borrowing was to first access cheaper funds from multilateral and bilateral lenders as might be available.

    “Thereafter, any balance will be raised from commercial sources, which may include securities issuance such as Eurobonds in the international capital market,” it disclosed.

    Ms Oniha said that with the country’s 2019 Budget left with only six months for implementation as a result of the late passage of the bill, the government aimed to start its budget implementation for 2020 in January.

  • Nigeria’s Eurobonds debt rises to $10.9bn from $1.5bn in 2015

    Nigeria’s external debt stock rose by 148 percent in almost four years of the President Muhammadu Buhari administration, data from the Debt Management Office (DMO) showed.
    The external debt soared to $25.61 billion as at March 31, 2019 from $10.32 billion as at June 30, 2015, according to the DMO, with Eurobonds worth $10.87 billion accounting for the largest chunk of the external debt, as it rose by 625 percent from $1.5 billion as at June 30, 2015.
    The nation’s debt owed to the World Bank also rose to $8.90 billion from $6.19 billion in the period under review.
    China, through its Export-Import Bank of China, is the third biggest lender to Nigeria with a loan of $2.55 billion as of March 31, 2019, up from $1.39 billion as of June 30, 2015.
    Other lenders are African Development Bank ($1.25 billion), African Development Fund ($834.18 million), Arab Bank for Economic Development in Africa ($5.88 million), Export Development Fund ($59.15 million), Islamic Development Bank (15.51 million) and the International Fund for Agricultural Development ($176.19 million).
    Bilateral debts from France (Agence Française de Dévelopement), Japan (Japan International Cooperation Agency), India Exim Banking of India and Germany (KfW) stood at $366.07 million, $74.63 million, $26.46 million and $171.79 million, respectively.
    Last month, the agency primarily responsible for coordinating the nation’s debt management said that the Federal Government would borrow $2.7 billion from foreign sources this year, adding that it planned to first access cheaper funding from multilateral and bilateral lenders while any balance would be raised from commercial sources, which might include securities issuance such as Eurobonds in the international capital market.

  • Investors oversubscribe Ecobank $450m Eurobond

    Investors oversubscribe Ecobank $450m Eurobond

    The debut $450 million Eurobond recently issued by Ecobank Transnational Incorporated was oversubscribed by investors, the company has disclosed.

    The money was raised to assist the Lomé-based parent company of the Ecobank Group to meet its general corporate purposes and to refinance existing Holdco obligations.

    The Global Offering is a 5-year unsecured note (144A/RegS) listed on the main market of the London Stock Exchange (LSE) and the bond will mature in April 2024.

    The lender said it issued the notes with a coupon pricing of 9.5 percent with interest payable semi-annually in arrears.

    On Thursday renowned rating agency, Fitch, assigned a ‘B’ rating on the debt instrument.

    In a statement issued by Ecobank Thursday, it said subscriptions were received from investor across the globe, including United Kingdom, United States, Europe, the Middle East, Asia, and Africa.

    “This is another first for Ecobank and I’m very excited at the prospects for the Group as we continue the second phase of our 5-year ‘Roadmap to leadership’ strategy.

    “Our efforts toward greater operational and capital efficiency are paying off, and this offer is another example of the measures we are taking to strengthen our institution and deliver value for all of our stakeholders,” Group CEO of Ecobank, Mr Ade Ayeyemi, said.

    The Group Chief Financial Officer, Mr Greg Davis, noted that, “The success of this Eurobond reflects appetite from high quality and real money institutional investors globally and the trust that continues to be conferred on our institution and the markets we have chosen to participate in.”

     

  • Nigeria raises $2.86bn Eurobonds to fund 2018 budget

    Nigeria raises $2.86bn Eurobonds to fund 2018 budget

    The Federal Government on Wednesday said it had raised 2.86 billion dollars three-series international bond under its Global Medium Term Note Programme.

    Mr Paul Abechi, Special Adviser to the Minister of Finance on Media and Communications disclosed this in a statement in Abuja.

    He said that the offering attracted significant interests from leading global institutional investors with a peak combined order booking of over 9.5 billion dollars.

    Abechi said that the outcome of the transaction reflected an over-subscription of more than three times and demonstrated the prevailing confidence of international capital market investors in Nigeria’s investment story.

    “In spite of significant oil and wider macro market volatility, Nigeria has successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa.

    “The successful transaction follows closely behind Nigeria’s successful engagement with the Fitch rating agency and their subsequent decision to change the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals.”

    Abechi said that the “notes” comprised a 1.18 billion dollar seven-year series, one billion dollar 12-year series and 750 million dollar 30-year series.

    He said that the seven-year series would bear interest at a rate of 7.62 per cent, while the 12-year series would bear 8.75 per cent rate and 9.25 per cent interest for the 30-year series.

    He added that in each case, they would be repayable “with a bullet repayment of the principal on maturity”.

    “The offering is expected to close on or about Nov. 21, 2018, subject to the satisfaction of various customary closing conditions.

    “The Republic intends to use the proceeds of the Notes towards funding of the fiscal deficit and other financing needs.

    “The Notes represent the Republic’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.”

    According to Abechi, when issued, the notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.

    “The Republic may apply for the notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.”

    He also said that the pricing was determined following a series of meetings with investors in London and conference calls with investors globally, by the Nigerian delegation.

    The delegation comprised of Minister of Finance, Mrs Zainab Ahmed, Minister of Budget and National Planning, Sen. Udoma Udo Udoma and Central Bank Governor, Mr Godwin Emefiele.

    Others, according to him, were Ms Patience Oniha, Director-General, Debt Management Office (DMO) and Mr Ben Akabueze, Director-General, Budget Office of the Federation.

    “The Joint Lead Managers for the issuance were Citibank Global Markets Limited and Standard Chartered Bank and the financial advisors were FSDH Merchant Bank Limited,” Abechi said.

    He quoted the minister as saying that following the successful pricing, Nigeria was investing strategically in critical capital projects.

    This, she said, was to bridge the nation’s infrastructure deficit, provide better operating environment for the private sector, and improve the standard of living of our citizens.

    “The proceeds of this issuance will provide critical financing for projects in transportation, power, agriculture, housing, healthcare and education and the capital elements of our social investment programmes.

    “Nigeria’s Economic Recovery and Growth Plan is delivering results,” she added.

    Also commenting on the notes’ pricing, Oniha said Nigeria’s continued ability to access the international markets to raise capital was a testimony to investor’s confidence which had been supported by continuous engagement with them.

    “The issuance of the Eurobonds, which received the prior approval of the Executive and Legislative arms of government, will not only provide capital to finance various projects, but also contribute towards the achievement of the Debt Management Strategy.

    “The ability to raise 2.86 billion dollars, which is the exact amount government needed in volatile and challenging market conditions, has been described as a stellar outcome.”

  • Reps suspend consideration of Electoral Act, $2.8 billion Eurobond

    Reps suspend consideration of Electoral Act, $2.8 billion Eurobond

    Hope for a quick approval of the $2.8 billion Eurobond loan request by President Muhammadu Buhari to finance the 2018 budget and amendment to the Electoral Act No. 6 of 2010 has suffered another setback following the decision of members of the House of Representatives to step down consideration on the report.
    Though the upper chamber of parliament Wednesday approved government’s request to issue the $2.786 billion Eurobond on international debt markets, members of the House of Representatives Thursday stepped down consideration of the report of the House Committee on Aids, Loans and Debt Management.
    While no explanation was given for deferring consideration of the committee’s report on the new external capital raising of the $2.8 billion Eurobond from the international capital market to fund the 2018 budget, the lawmakers also stepped down the bill for an amendment of the Electoral Act No. 6, which was also meant for consideration and adjourned till next Tuesday.
    The report of the $2.8 billion Eurobond ought to have been laid before the House by the Chairman, House Committee on Aids, Loans and Debt Management, Hon. Adeyinka Ajayi, on the floor of the House during Thursday plenary session.
    He told members that the $2.876 billion was part of the $82.54 billion to refinance the balance of the $500 million matured Eurobond in the international capital market.
    Meanwhile, the House passed a bill seeking an amendment to the National Broadcasting Commission (NBC) Act, which scaled through the second reading.
    The bill jointly sponsored by Hon. Odebunmi Olusegun, (APC, Oyo) and Hon. Abiodun Faleke (APC, Lagos) seeks to amend the third schedule of the NBC Act by providing that every television/radio, cable or station should have educational programme that will teach students various subjects or courses in line with school syllabuses or curriculum, and will also make educational programmes compulsory in all television channels in Nigeria when passed into law.
    Faleke had argued that the bill is part of “efforts to tackle and salvage the falling standard of education which is currently a national concern and embarrassment,” stressing that “the bill is aimed at making a lot of differences to the lives of students and is expected that qualified teachers will be engaged by the service provided to teach pupils online/visuals.
    When put to a voice vote by Speaker Yakubu Dogara, the bill was endorsed by majority of the lawmakers after Hon. Mohammed Monguno (APC, Borno), Hon. China Adamu (APC, Niger), Hon. Ehiozuwa Johnson Agbinayinma (APC, Edo), and Hon. Chris Azubuogu (PDP, Anambra) all agreed that the Bill came at the most auspicious time.
    In a related development, the House of Representatives directed the authority of the National Youth Service Corps (NYSC) to rescind its decision to suspend the Benue State University from participating in its compulsory exercise.
    The Vice-Chancellor of the institution, Prof. Msugh Kembe, Wednesday told journalists in Makurdi, the Benue State capital, that the NYSC reportedly banned prospective graduates from the institution from being enlisted for the NYSC programme.
    Therefore, moving a motion on the development under matter of urgent public importance during Thursday’s plenary, Hon. Orker-Jev (PDP Benue State) urged lawmakers to mandate the NYSC authority to reverse the suspension of Benue State University graduates from further participation in the NYSC programme.
    Orker-Jev told the House that NYSC refused to provide any reason for its action even upon persistent enquiries until Wednesday, October 17, 2018, when it released a letter attempting to justify its action, which was that some graduates of the institution falsified their age in the bid to participate in the scheme.
    Most of the members, who spoke on the matter, were disturbed that the action of a few students is bringing hardship on many innocent graduates who have not been included in the allegations but are eager to serve the nation.
    While NYSC was urged to reverse the decision, which was tagged “illegal,” and to immediately mobilise prospective corps members to participate in the impending Batch ‘C’ scheme coming up next month, the issue was referred to the House Committee on Youth Development and Legislative Compliance to ensure compliance.
     

  • Don’t float $2.8bn Eurobond, Ezekwesili tells FG

    Don’t float $2.8bn Eurobond, Ezekwesili tells FG

    A former Vice-President (Africa) of World Bank, Mrs Oby Ezekwesili, has advised the Federal Government to suspend its plan to raise 2.8 billion dollars in Eurobond to fund the 2018 budget.
    Ezekwesili, who was a former Minister of Education, gave the advice while speaking to newsmen in Lagos.
    The former minister was reacting to the statement made by the Minister of Finance, Hajia Zainab Ahmed, on Sunday that the government would soon float the bond.
    Speaking at the annual International Monetary Fund (IMF) meeting in Bali, Indonesia, Ahmed said the country was exploring the bond option to strictly fund capital projects in the budget.
    “The upcoming bonds that we are trying to raise will be within the 2018 budget framework and with approved targets.
    “So, we are not going beyond what was approved in the budget. The budget has approved for us to borrow both locally and internationally and we have a bond issuance with the range of 2.8 billion dollars that we need to raise before the year closes out.
    ‘’The bond will be used to fund capital projects in the 2018 budgets,’’ she said.
    The minister added that the country had more legroom for borrowings despite high debt profile, saying the total debt profile of the country was just three per cent of the GDP.
    Reacting , Ezekwesili said the plan to borrow more was not good for the health of the economy.
    She argued that the country currently spent 69 per cent of its revenue on servicing both local and international debts.
    The former World Bank chief added that borrowing more was not a sustainable step as the country was not generating much revenue to cater for its critical development needs.
    “What, in my view, the plan to float the bond portends for the economy is that the Federal Government is digging in instead of digging out.
    “Already, the debt service to revenue is so high. Today it is 69 per cent. 69 per cent of revenue is used to service our debts.
    “That is not a sustainable situation. I see the government quote all the time `Debt to GDP ratio’, but that is like a blunt instrument in an environment where your GDP is not reflective of your productivity.
    “We measure your productivity by the revenue the GDP generates in the form of revenue of government that comes as a result of the GDP.
    “Your debt to GDP is three per cent and you think that gives you the legroom to borrow and borrow. No, that is not your instrument.
    “Your instrument is your debt service tool, which is the revenue,” she said.
    Ezekwesili urged the government to avoid plunging the country to insolvency someday with borrowings, by exploring innovative ways to increase revenue.
    She particularly urged the government to diversify revenue sources and pursue deep sector and structural reforms to reposition the economy.
    The former World Bank VP urged the country to proritise its needs and deploy limited resources only in those areas with massive impact on development.
    Ezekwesili, a presidential candidate of Allied Congress Party of Nigeria (ACPN), said the economy was in need of workable policies for revival, and promised to cause an economic turnaround if elected.

  • Diversion of $600m Euro Bond: Senate Summons Adeosun, Amaechi

    Diversion of $600m Euro Bond: Senate Summons Adeosun, Amaechi

    Minister of Finance, Mrs Kemi Adeosun, her counterpart, in the Transportation Ministry, Rotimi Amaechi and the Director-General, Debt Management Office, DMO, Mrs Patience Oniha, have being invited by the Senate to give explanations on why $100million out of the $600 million Euro bond obtained by Nigeria from the Chinese government for the rehabilitation of the power sector, was diverted as counterpart funding for the remodeling of Lagos, Abuja, Kano and Port Harcourt Airports.

    They are to make explanations to the Senate Joint Committee on Public Accounts, Power, Steel Development and Metallurgy, which issued the summon on them on Thursday.

    The bond was taken by the government to revive the power sector was allegedly diverted by the federal government to remodel four Airports across the country.

    Adeosun is to appear before the Committee next week Thursday along with her counterparts

    The Chairman of the committee, Senator Mathew Urhoghide (PDP, Edo South) gave the order following failure of the Permanent Secretary, Ministry of Transportation, Sabiu Zakari to give convincing explanations on why the loan was diverted when he appeared before the Committee.

    Urhoghide said the summoning of the ministers very necessary for the committee to get the rationale behind the movement of such loans from its original purpose to a fresh one.

    “There was the need to establish the desirability of the loan, because when the loan was being douche by the Federal Government, it was very clear what it was for and not as counterpart funding to finance Chinese loan for the Airports.

    “We need to establish the desirability of the loan, it was for power sector, to develop the sector, it was for the Nigerian Electricity Bulk Trading Company, NBET, Transmission Company of Nigeria, TCN, among others. Aviation was not in the picture, Nigerian National Petroleum Corporation, NNPC, was used to secure the loan. Aviation did not apply for it, not in the list of agencies to benefit. There was no Presidential approval, Aviation was not listed as a beneficiary,” he said.

    The Committee Chairman added that the Senate would want to know whether there was a formal letter from the Ministry of Aviation to the Finance Ministry to finance the counterpart funding as well as to assess the $500 million, just as he said that the Upper Chamber would want to know whether the process got the blessings of the National Assembly.

    “The Ministry must furnish it with vital information on the update of the project, how much has been spent on the project, among others,” he stressed.

    Responding, the Permanent Secretary, Ministry of Transportation, Sabiu Zakari who promised to come with the needed information next week, said that the $100 million was a loan that was given to the ministry, which must be paid back.

    Also at the committee sitting, the Managing Director/Chief Executive Officer of the Nigerian Sovereign Investment Authority (NSIA), Uche Orji, and the Chief Executive Officer of the Nigerian Electricity Bulk Trading Company, NBET, Dr. Marylyn Amobi, were mandated to furnish the parliament with evidence, bank statements, statement of account and all other relevant documents to prove that the $350 million fund was safe.

    Orji had told the Senate Committee that the fund has increased by $34 million, that $397.5 million was initially realised, deduction of $13.5 million to service the interest of the amount, reduced the funds to $384 million.

    He said, “The NBET funds are intact with the NSIA. As of our September statement, it has grown from $350 million to $397.5 million. $13.5 million was recalled by NBET to service the interest. So what we have at the moment is $384 million. So the funds are with us and they are safe.”

  • FG to float $2.5bn Eurobond for capital project before year end – DMO

    FG to float $2.5bn Eurobond for capital project before year end – DMO

    The Debt Management Office (DMO) on Thursday said the Federal Government would float a Eurobond to raise 2.5 billion dollars before the end of 2017.

    The DMO Director-General, Patience Oniha, made this known at the 2017 Nigerian Debt Capital Markets Conference and Awards, organised by the FMDQ OTC Securities Exchange in Lagos.

    Oniha said that the borrowing would enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects.

    She said that the proposed Eurobond issuance would complement the 1.5 billion dollars raised from the international market in March 2017.

    Oniha said the nation’s Treasury Bills portfolio presently stood at N3.7 trillion, adding that DMO planned to refinance it with foreign borrowing to reduce pressure on the domestic market.

    She said that Nigeria needed to build stronger and responsive institutions that could support infrastructure agenda of the government.

    Oniha said that government had proposed to channel new borrowings into the capital investments instead of consumption.

    “The debt ratio is not tangible and adequate components of borrowing, because it is not going into funding others than capital investment,” she said.

    “Let us channel new borrowings into capital investment instead of consumption.”

    On the N100 billion Sukuk Bond, the director-general said that the Federal Government had identified 25 road projects to be funded with the proceeds.

    She said that among the roads listed were Ore-Sagamu Road, Kaduna Bypass, Enugu- Port-Harcourt Road, Kano-Maiduguri and Benin-Lokoja Road, among others.

    According to her, government has also decided to finance other trunk A roads which will provide the needed support to accelerate the nation’s developmental goals.

    She said that Nigeria should build stronger and responsive institutions that could support infrastructure agenda of the government.

    “We need to build the business in terms of products that meet specific needs of investors,” she said.

    Oniha said that the acceptance of the offer was an indication of the viability of the instrument as an investment option, as well as a demonstration of utmost faith in the economy.

    She also commended the federal government for the policy support that led to the success of the initial offer.

    The director-general said that it had been encouraged to introduce new instruments to aid government’s funding.

    She said investment experts were optimistic that with the issuance, a new instrument had been introduced to the Nigeria’s capital market.

    Oniha said that the new instrument would add to the variety of products available for domestic issuers and investors.

    Investors in the offer, which closed on September 22, with a seven-year tenor, included pension funds, banks, fund managers and retail investors.

    TheNewsGuru.com reports that the N100 billion Sukuk Bond issued by the federal government was oversubscribed by about N6 billion.

    The seven-year Sukuk attracted a subscription of N105.88 billion according to the DMO.

  • Access Bank redeems $350 million Eurobond

    Access Bank Plc has announced the final redemption of the $350,000,000.00 Eurobond Notes due July 25, 2017.

    The Securities were issued in 2012 by Access Finance B.V. – a direct, wholly owned subsidiary of the Bank – on the back of an unconditional and irrevocable guarantee of the Bank. In October 2016, holders of $113 Million of this note elected to exchange same for a new 5 year bond issued by the bank at the time.

    Upon maturity of the Eurobond in July 2017, the outstanding portion of $237,003,000 as well as the final coupon value of $8,698,010.00 was redeemed from the bank’s available cash reserves.

    Access Bank has continued to maintain a robust balance sheet, supported by its strong liquidity position. The implementation of a disciplined capital and liquidity plan ensured that the Bank was proactive and focused in raising capital in the International market. Key successful Eurobond transactions from the market include: US$350 million (2012), US$400 million Subordinated Notes and the US$300 million Senior Notes comprising US$113 Million exchange and US$187 million new notes (2016).

    The latter was issued at an extremely difficult macro–economic condition in 2016. Nonetheless, the success of the transaction, the first during the period, repositioned the Nigerian market in a positive light, following a year of volatile market conditions, and paved the way for other corporates to gain access to the market.

    According to the Group Managing Director/CEO, Herbert Wigwe, “Access Bank’s ability to redeem the $350,000,000.00 Eurobond Notes highlights the resilience of our balance sheet and the efficiency of our asset and liability management process, especially in the face of a macro underlined by FX illiquidity, double digit inflation and currency devaluation. By building a robust risk management culture and sustainable capital & liquidity management strategy, the Bank has positioned itself to compete and win in the challenging, but recovering macro condition.”

    Access Bank has continued to leverage its corporate strategy and an experienced Board and Management, to consistently deliver solid performance. The recent re-affirmation of its credit ratings by several credit rating agencies as well as an upgrade to Aa- from A+ by Agusto, reinforces the bank’s strong fundamentals