Source(s): CNBC Africa
SEC Business News
Nigerian banks’ moves to raise additional funds through bonds for funding infrastructure in collaboration with the public sector, following the favorable disposition of the Central Bank of Nigeria (CBN) and the Federal Government to the bond market, is causing disquiet in the industry. Chairman King recently reported that the Nigerian corporate bond market should emerge, given recent steps by the Central Bank of Nigeria (CBN)
The need by most banks to embark on some self-cleansing, such as full provisioning for their exposure to the capital market, coupled with the imminent December deadline for a uniform financial year-end, are posing challenges to the banks’ entrance into the corporate bond market.
Consequently, while some of the banks are lagging behind in meeting the necessary requirements for funds, other banks have commenced frantic moves to raise funds through bonds for the funding of infrastructure in collaboration with the public sector. Read the rest of this entry »
First Bank of Nigeria said on Monday it wants to raise a N500 billion ($3.4 billion) bond in what would be Nigeria’s first corporate bond in three years. First Bank of Nigeria, Nigeria’s oldest bank, said it would hold an extraordinary shareholders’ meeting to vote on the issue on Aug. 20 in Nigeria’s capital, Abuja.
“Right now there is a yearning for corporate bonds. Given that this is issued by an institution that is reputable, investors would go for it,” said Henry Ogbuaku, Head of Research at Express Discount Asset Management.
Industry sources say First Bank had received regulatory approval for the bond issue from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). First Bank is also seeking approval from the Nigerian Stock Exchange to trade the bond at the bourse. The bank aims to use the bond issue to raise funds for infrastructure projects such as the Lagos-Ibadan highway, one source said.
Nigerian companies have not ventured into the corporate bond market for several years because of the high cost of issuing debt and tax concerns. Access Bank was the last institution with its N13.5 billion bond in October 2006. Lamido Sanusi, the new governor of the Central Bank of Nigeria (CBN), said earlier this month that he wants more companies to raise funds through the bond market. Sanusi said the regulator would seek to reduce the cost of corporate bond issues and work with tax authorities to have a tax-free yield curve. Read the rest of this entry »
