First Bank of Nigeria Concludes Debt Capital Raising

Proshare

August 12, 2013/ Press Release


FBN Holdings Plc. today announces that its largest subsidiary, First Bank of Nigeria Ltd. ('FirstBank'), has concluded a debt capital raising exercise in the international markets through a US $300 Million subordinated Tier 2 transaction. The proceeds from the capital raising will be used by FirstBank for general banking purposes.


In line with FirstBank's capital management strategy, the institution has chosen this route to ensure that it remains well capitalised with an improved total capital adequacy ratio (CAR) of 22.5% up from 20.1% as at the end of March 2013, and supports loan growth over the near term. In addition, the transaction further diversifies and extends the maturity of the Bank's foreign currency funding.

 

The Tier 2 capital transaction has a seven-year maturity and is callable on the 5th anniversary of the issuance date. The issue carries an initial coupon of 8.250% on the nominal par amount, which resets at the call date to a new fixed rate (no step-up) until maturity. The Tier 2 capital treatment amortises over the last 5 years prior to maturity.


The successful offering was achieved within the context of volatile debt capital markets, especially for Emerging Market borrowers.  This transaction is FirstBank's second Tier 2 capital raise, following on its debut 2007 US $175 Million Tier 2 capital raise which carried a 9.750% coupon rate and which was called by the institution in 2012. This makes FirstBank the only Nigerian banking institution to carry out not only one, but two consecutive subordinated Tier 2 capital raising transactions in the international debt markets.

 

Citigroup and Goldman Sachs International acted as advisers and Joint Lead Managers to FirstBank on the transaction.

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