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GTBank completes N13bn first tranche 5, year bond

By Peter Egwuatu
Guaranty Trust Bank (GTBank) Plc has completed the placement ( “Offering”) of N13.165 billion Fixed Rate Senior Unsecured Bonds due 2014.

At the Completion Board Meeting held yesterday in Lagos, the Bank finalised arrangements for the Offering of the Bonds. The Completion Board Meeting was attended by the Bank’s directors led by its Chairman, Owelle G.P.O Chikelu, CON and Mr. Tayo Aderinokun, MFR, the Bank’s Managing Director/Chief Executive, as well as the professional parties to the Offering. The occasion also had the representative of the Securities & Exchange Commission (SEC) in attendance.

The Bonds, which are rated Aa- by Agusto and Co. Limited, were placed through a book building exercise with institutional investors conducted by GTB Asset Management Limited, WSTC Financial Services Limited and FBN Capital Limited, acting as Issuing Houses/Book Runners.

The Bonds are issued at par value and will have a coupon of 13.5% per annum, which is the cut-off price determined by the Bank and the Issuing Houses/Book Runners upon the conclusion of the book building exercise. An application has been filed with The Nigerian Stock Exchange (NSE)  for the listing and admission to trading of the Bonds.

The Offering is the first tranche under the Bank’s N200 billion Debt Issuance Programme, through which the Bank intends to raise debt from time to time over a period of two years in order to significantly enhance its funding/lending capabilities. The Offering is also the first Naira-denominated bond issue by the Bank. In January 2007, the Bank successfully issued US$350 million Eurobond Notes due 2012 in the international capital markets without the guarantee of either the Federal Government or any international financial institution.

Owelle Chikelu, who chaired the Completion Board Meeting, stated, “The Bonds represent a unique opportunity to hold investment-grade fixed income securities with coupon payable on a semi-annual basis at an attractive yield relative to government bonds of comparable maturity.”

Mr. Tayo Aderinokun, the Bank’s MD/CEO, further commented that “whilst there was strong demand during the book building exercise, the Bank made a conscious decision not only to use a relatively moderate size transaction to discover the depth and potential of the Nigerian corporate bond market but also to arrive at a reasonable pricing benchmark for its Naira-denominated debt especially in light of the 2-year validity period of the Debt Issuance Programme.

It is the Bank’s intention to continue to access the market in the foreseeable future. Most importantly, the Bank will apply the lessons learnt on this transaction in offering Capital Markets and Advisory Services to its corporate customers.”


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