Trading Commences on GT BanksA¢a,¬a,,¢s N13 Billion Bond
First Offer By Book Building
History was made today as 13.5% Fixed Rate Senior Unsecured Non-Convertible Bond of Guaranty Trust Bank Plc valued at N13.165 billion issued through a Book Building process was listed on The Nigerian Stock Exchange. This is the first bond to be listed through this process.
Book Building is a capital raising process that aids price and demand discovery. It is a process used for marketing a public offer of securities. The issue is to enable the GT Bank access long-term capital to finance medium-to-long term projects, particularly developmental and infrastructural projects in the key sectors of the economy.
The bond, which is the first tranche of the bank’s N200 billion Debt Issuance Programme has a five-year tenor with 13.5 percent Coupon, and semi annual interest payment fixed for June 18 and December 18.
Commenting on the uniqueness of the bond, an Executive Director of WTSC Financial Services Limited, Joint Issuing House to the offer, Mr. Afolabi Afolayan said the bond was assigned an “Aa-“ rating by Agusto and Company Limited. The lead Issuing House was GTB Asset Management Limited while FBN Capital Limited and WSTC Financial Services Limited were the Joint Issuing Houses.
Afolayan explained that GT Bank’s decision to give back to investors withholding tax charged on the Bond would increase the yield to 15 percent from 13.5 percent earlier promised investors. He also underscored the potential liquidity of the bond as one of its unique characteristics, saying this would enhance demand for the instrument on The Nigerian Stock Exchange. He commended The Exchange for facilitating the Book Building initiative through its huge investment in Information and Communication Technology (ICT) that has greatly enhanced market efficiency.
Officials of The Nigerian Stock Exchange said The Exchange’s Automated Trading System (ATS) and Central Securities Clearing System (CSCS) Limited stand to provide seamless trading, settlement and delivery on the bond like other listed financial instruments.
The Exchange has also reduced the transaction charges in bond as part of the incentives to make investment in bonds very attractive. Many companies are expected to take advantage of Book Building process to raise fund through the capital market. The process does not only reveal the demand and price investors are willing to pay, but is also highly cost-effective.
Assistant General Manager/Head
Corporate Communications Department
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