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Zenith Bank’s $500m Eurobond records 300% oversubscription

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By Babajide Komolafe

Zenith Bank Plc has issued a five-year senior unsecured benchmark bond  of $500 million on the Irish Stock Exchange, which recorded  oversubscription of more than 300 per cent.

The issue is in addition to the existing $500 million which matures in April 2019.

Subscription to the Eurobond 2022 issue was $2.1 billion and recorded landmark success on three counts: pricing, subscription level and global appeal.

Available details of the issue show that the subscription level makes it the highest by any non-sovereign and non-supranational company in sub-Saharan Africa.

The bond was issued at par with both coupon rate and yield to maturity rate priced at 7.375 per cent. The 7.375 per cent pricing is 50 basis points better than the sovereign of 7.875 per cent. The rating of both the sovereign and Zenith Bank is B+ with the bond issue also rated B/B+.

The 300 per cent oversubscription indicates a huge endorsement of the Zenith Brand as a reputable, international financial institution recognized for superior performance and creating premium value for all stakeholders.

The bond opened trading at 101.15 per cent of par value on its first day of trading which expressed the huge demand for the issue in the current market.

Also, sources close to the issue said the subscription came from around the world i.e. Hong-Kong, China, Singapore, Europe and the United States of America to further affirm the global acceptance of Zenith Bank as an international brand.

Sources familiar with the details of the issue said over 200 investors participated with the largest single ticket subscription being over $100 million. They pointed at the overwhelming success of the issue as attesting to the visionary leadership of the institution and the consistent excellent track record of the bank over the last 26 years.

The bank established a $1 billion Global Medium Term notes in 2014, with $500 million already raised in the first tranche. The first tranche notes was listed and admitted to trading on the Irish Stock Exchange in 2014.

The net proceeds of the Second Tranche Notes would be utilized for its general banking business.

Zenith Bank has consistently recorded good ratings from both local and international rating agencies.

The ratings are supported by its leading market position in all key performance indices. The bank is adjudged the largest bank in Nigeria by Tier-1 Capital, and has also earned recognition in other areas of operations which includes Best bank in Corporate Governance, Best Customer Service Bank in Nigeria and Most Customer-focused bank in Nigeria.

Its shares are currently freely traded on the London Stock Exchange following a listing of $850 million worth of shares by way of a GDR. With operations in Nigeria, the United Kingdom, Ghana, Sierra Leone, Liberia, China and South Africa, Zenith Bank stands out in the banking industry through superior service quality, unique customer experience and sound financial indices.

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