23 May 2011
Guaranty Trust Bank’s recently issued US$500 million Eurobond is reported to have been oversubscribed according to this report from Kunle Aderinokun of Thisday.
“Aside its landmark achievement of being the first Sub-Saharan Africa financial sector benchmark Eurobond (outside of South Africa ), it is already trading strongly with the market pricing the instrument at $101.13 in the first full week of trading.
The 7.5 per cent five-year deal, priced at $98.981, is GTBank’s second visit to the international bond market coming on the heels of a remarkable $350 million Regulation S Eurobond issue in January 2007, which made GTBank the first Nigerian company to issue Eurobonds and also, the first Nigerian institution to venture into the international capital markets without a sovereign guarantee or credit enhancement from any international financial institution.
The GTBank Bond, which has J.P Morgan and Morgan Stanley as joint book runners, garnered strong investor response, was oversubscribed and placed with over 50 accounts with US accounts representing 37 per cent of the total allocations, U.K 31percent, Africa 16 per cent, Europe 13 per cent and others 4 per cent.
A further breakdown shows that asset managers received 56 per cent, Banks 21 per cent, Hedge funds 12 per cent and other 9 per cent. This allocation shows a balanced international distribution of the Eurobond at a pricing consistent with the Bank’s peers in other emerging markets.
In July 2007, GTBank became the first Nigerian Company and first African bank to be listed on the main market of the London Stock Exchange (LSE) with the listing of its Global Depository Receipts (GDR) in an unprecedented concurrent global offering in the domestic and international capital markets.
The US $500 million Eurobond issue has set another history of the Nigerian financial industry as it is the first benchmark size, non-sovereign offering out of Nigeria .
A source had told THISDAY that the unsecured notes have been assigned a long term rating of B+ (Stable) by both Standard & Poor’s and Fitch.
The source had disclosed further that the proceeds from the offer will be used partly to refinance the Bank’s US$350 million Eurobond maturing in January 2012 and partly for general corporate purposes.
“With a strong market reception and a successful placement that signposts the strength of GTBank’s credit and its acceptance in the international markets, several analysts have also attributed the success of this outing to the effectiveness and resonance of the ongoing Central Bank of Nigeria (CBN) reforms which have inspired international institutional investor confidence in the Nigerian Banking Sector. The sweeping CBN reforms have substantially strengthened and stabilized the governance and operational structures of the Nigerian banking sector,” the source had said.”