Access Bank Headoffice

Obinna Chima 

Access Bank Plc plans to issue a $350 million five-year Eurobond with price around seven per cent, Reuters quoted a source at the bank to have said Wednesday.

THISDAY had exclusively reported that the commercial bank was considering issuing a Eurobond on the London Stock Exchange (LSE) to enable it raise funds for its operations.

Preparatory to this, THISDAY had also revealed that Access Bank had mandated Citigroup and Goldman Sachs International to arrange series of global fixed income investor meetings in Europe and the US which commenced last week Wednesday.

According to the news agency, the bank is likely to benefit from strong demand among frontier market investors for scarce African bonds. It also quoted an analyst said that if the deal is successful, other Nigerian banks may be encouraged to also issue debt.

“The bond will be priced this week, and they are looking at yields within the 7 per cent range,” the source was quoted to have said.

Access Bank follows Guaranty Trust Bank Plc which issued a $350 million 5-year bond in 2007, and First Bank of Nigeria which launched a $175 million 10-year bond the same year. A follow-up 2011 issue from GTB is currently trading around 5.8 per cent.

Nigeria's debut sovereign $500 million Eurobond, issued in January 2011, was more than twice oversubscribed. The 10-year paper, priced with a yield of 7 per cent, was trading at 5.43 per cent on Wednesday.

Head of Fixed Income at Silk Invest, a London-based Investment House Focusing on Frontier Markets, John Bates, said: “The banks tend to benchmark themselves off each other so the success of other banks coming to the market will depend largely on the success of this deal.”