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Tuesday, August 06 2019 04:37PM / by Moody’s Investors Service
- Nigeria's Access Bank has
taken on Diamond Bank's liabilities and will repay Diamond's $200 million bond
on maturity
- Access Bank's stronger
governance and liquidity reduces the risk of default for former Diamond
creditors after the merger of the banks
Nigerian lender Access Bank
Plc has reduced default risks for former Diamond Bank Plc creditors thanks to
stronger governance and liquidity after the two merged in March, Moody's
Investors Service says in a report published today.
"Access Bank is now
responsible for all of Diamond Bank's liabilities and confirmed it will repay
at maturity a $200 million bond originally issued by Diamond," said Peter
Mushangwe, Analyst at Moody's. "Access has stronger liquidity than
Diamond, sharply reducing the risk of default."
Former Diamond creditors
should also benefit from Access Bank's more stable board and higher
concentration of independent directors, which enhances the quality of its board
oversight. Access Bank also has better-structured board committees. It will
subject management to more thorough scrutiny, and makes it more likely that
Access will achieve the majority of its merger objectives, including a
reduction of its stock of nonperforming loans within the intended timeframe.
Diamond's attempt to become
a leading Nigerian retail lender led to a build-up of nonperforming loans that
ultimately threatened its solvency. Diamond's liquidity management was also
poor, leaving it with insufficient foreign currency balances to cover near-term
obligations.
Credit
The
article Moody's
- Access Bank To Pay off $200m Bond Issued By Diamond first appeared on Moodys.com on Wednesday May 8th, 2019.
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