First Bank of Nigeria Limited will soon hit the international financial market to raise additional $500million capital for its operations.

It was learnt that the bank would be holding a road show to drive the Eurobond bond issue Thursday, in London.

The bank, which for sometimes has been seeking regional expansion through a planned combination with Ecobank Transnational, last year acquired 100 per cent equity interest in the West African subsidiaries of the International Commercial Bank Financial Group Holdings AG (ICBFGH). With that, the Nigerian bank expanded its operations to four more countries on the continent.

ICB’s West African subsidiaries employ over 600 people, with over 120,000 customer accounts and are focused on the mid-corporate, small and medium scale enterprises (SMEs) and retail segments.

With ICB Ghana, ICB Sierra Leone, ICB Guinea and ICB Gambia, the four new markets have a total of 28 branches of which 17 are in Ghana, five in Guinea, four in Gambia and two in Sierra Leone.

There are indications that the issue will be managed by Goldman Sachs and Citigroup that also managed the $300 million Tier-2 Eurobond that FirstBank issued in August last year.

Other Nigerian lenders that have raised capital via Eurobonds this year include Zenith Bank $500 million, Access Bank $400 million and Diamond Bank $200m.

FCMB is also said to be on the line, last week mandated Citi and Standard Chartered Bank to raise Eurobonds expected more to follow.

Citi Bank’s country head for Nigeria, Omar Afeez, was quoted to have said recently that, ‘The demand for long-term dollars is increasing in Nigeria as industries such as oil and gas and power develop,’ he said, adding that the demand could not be met locally.

He said banks were tapping Eurobonds to bolster their capital bases and also to finance bigticket deals in the oil and gas and newly privatised power sectors. Elections next year could become a worry if they affect the naira exchange rate to the dollar and interest rates.

‘I think we could expect a certain amount of volatility pre-election but have I seen people sitting on the fence? Not really,’ he said. ‘Commercial realities determine the strategies, so it’s really not elections per say, it’s what elections will do to the FX, interest rate market.’ The central bank governor has said he will work to maintain a stable exchange rate and will not lower interest rates before 2015.

He explained that security in the country has not deterred foreign investors from buying its assets, citing $1.1billion worth of Eurobonds it had traded for three local lenders so far this year.

He said that any spread of attacks further south or to the commercial hub of Lagos could start to put even established investors off.


Source: Sun