Global investors jostle for Access Bank’s $500m Eurobond

Access Bank Plc has announced its successful launch of a $500 million 144A/RegS Senior Unsecured Eurobond, as part of its Global Medium-Term Note Programme.

According to a notice the Nigerian Exchange Limited (NGX), signed by the company’s secretary, Sunday Ekwochi, the transaction recorded massive interest from top quality investors globally, including the United States, Europe, Middle East, Asia and Africa, anchored by a number of large tickets.

The offering, Access Bank stated, achieved the lowest (outstanding) Nigerian bank Eurobond coupon, “supported by an over 3x oversubscribed orderbook of over $1.6 billion, which represents the largest orderbook ever for a Nigerian bank Eurobond transaction.”

The Access Bank’s $500m Eurobond would mature on September 21, 2026, was issued with a yield and coupon of 6.125 per cent, with interest payable semi-annually in arrears.

“The coupon of 6.125 per cent is another first in the corporate Eurobond issuance space. Interestingly, the bond is already trading at a premium from issue levels with bids around 5.89 per cent levels whilst offers are around 5.78 per cent as the unmet demand from the auction filtered into the secondary market,” Access Bank said.

Access Bank Plc had few years ago announced the final redemption of its $350 million Eurobond notes due July 25, 2017.

Habert Wigwe, Chairman of Access Bank

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 the notes chose 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 million, as well as the final coupon value of $8.69 million, was redeemed from the bank’s available cash reserves.

The bank had in a statement stated, “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 on raising capital in the International market,”

Access Bank said the last note was issued at a period of 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.

“Access Bank’s ability to redeem the $350 million 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,” Access Bank’s Group Managing Director/CEO, Herbert Wigwe said.

“By building a robust risk management culture and sustainable capital and liquidity management strategy, the bank has positioned itself to compete and win in the challenging but recovering macro condition,” he added.

He said further that 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,” he said.