Access Bank to repay 2017 Eurobond

Access Bank Plc is planning to use part of a $300 million Eurobond it issued last month to help repay an existing Eurobond which is due to mature next year.
The Chief Executive of the bank, Herbert Wigwe, on Tuesday told journalists that the essence of the Eurobond was to make sure that “we have enough buffer and to refinance our current one on maturity.
The bank would also increase dollar lending to businesses to generate hard currency,”
The top tier Nigerian lender issued the five-year paper with a 10.5 per cent coupon last month, in the face of dollar shortages at home caused by an oil price slump which has pushed the economy into its first recession in 25 years.
“On the pricing alone, 10.5 per cent looks high, but if you put it in context of the background of dollar shortages, then you will see that it was successful,” he said.
In addition to last month’s issue, Access Bank has a $350 million 7.25 per cent bond maturing in July 2017. Another $400 million with a coupon of 9.25 per cent due in 2021. Wigwe said the bank was confident it would meet all obligations.
Foreign correspondent banks to Nigerian lenders have been worried this year about a risk of default on their trade lines due to dollar shortages in Nigeria and as the central bank rationed its own hard currency to save its dwindling reserves.
Nigeria, whose credit rating was downgraded by Standard and Poor’s to B in September from B+, wants to issue a $1 billion Eurobond by the end of the year although it has yet to appoint banks to arrange the sale.
Finance Minister, Kemi Adeosun, has said the country has $500 million of commitments for the planned bond and that any decision to increase the size of the offer would depend on pricing.