First Bank Nigeria Plc., have announced payment to bondholders in a bid to redeem its $300 million 8.25 percent subordinated notes, which was issued in 2013 having obtained the necessary approval.
The announcement comes as a follow up to a notice given on Friday 6th July 2018 to FBN Finance Company B.V. stating the bank’s intention to redeem the $300million 8.25% subordinated notes due August 2020.
According to Adesola Adeduntun, the managing director of the bank, the redemption of these notes ahead of maturity shows the strength of the bank’s foreign currency liquidity and balance sheet.
Adeduntun added, “despite the 2020 bond being a subordinated tier 2 instrument, we are able to redeem this without any impact on our capital ratios, as a result of the surplus tier 2 capital we currently hold which confirms the robust capital base of our Bank. To ensure the smooth redemption, we had systematically built up internal foreign currency liquidity on the back of our strong franchise and our deep market access in the course of the last year.”
The MD suggested that re-issuance will be a function of market conditions and the bank’s funding need, he said, “We are unlikely to be reissuing debt in Eurobond markets in the near term following this planned redemption, as re-issuance will be a function of our funding needs, market conditions, expected pricing in relation to alternative funding structure and sources. At the moment, the Bank has ample liquidity to meet foreign and local currency funding needs and maintains sufficient market access to raise additional funds, if required.”
“The Bank has remained focused on delivering on its strategic objectives and continues to execute towards; improving its asset quality and risk management; enhancing revenue generation, and optimizing operational efficiency.” He reiterated.