FBN Limited on Debt Capital


FIRST Bank of Nigeria Limited, has concluded a debt capital raising in the international markets through a $300m subordinated Tier 2 transaction. Folake Ani Mumuney, head, marketing and corporate communications, said the proceeds from the capital raising will be used by the bank for general banking purposes.

According to her, the capital raising was in line with the bank’s capital management strategy and the institution had chosen the route to ensure that it remained well capitalised with an improved total capital adequacy ratio of 22.5 percent up from 20.1 percent at the end of March 2013.

She said the transaction further diversified and extended the maturity of its foreign currency funding. “The Tier 2 capital transaction has a seven-year maturity and is callable on the fifth anniversary of the issuance date. The issue carries an initial coupon of 8.250 percent 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 five 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 First Bank’s second Tier 2 capital raise, following on its debut 2007 $175m Tier 2 capital raise, which carried a 9.750 percent coupon rate and which was called by the institution in 2012. This makes First Bank 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,” she said.

She said that FBN Capital, the investment banking and asset management subsidiary of FBN Holdings Plc, served as financial advisers with Citigroup and Goldman Sachs International also acting as advisers and Joint Lead Managers to First Bank on the transaction.

New Naira Notes Coming


CENTRAL Bank of Nigeria, CBN, is set to begin the circulation of new naira notes soon. Tunde Lemo, deputy director, operations, CBN, said the apex bank would take delivery of new naira notes before the end of September this year, with the smaller denominations (N5, N10, N20 and N50) being reprinted on paper.

 “We are going to take delivery of the new notes from this month of August. We will take delivery of the new notes before the end of September. The public will get a large quantity of the new notes to replace the old and mutilated notes, particularly the higher denomination notes in the first instance, then later the lower denominations,” he said.

On the scarcity of the lower denomination notes, Lemo blamed commercial banks for what he called poor circulation. “For the lower denomination well, I think the banks are the ones that are really not allowing the lower denomination in circulation, largely, because of the carrying value. Most people don’t require small denominations. But for buying things in the market, if you look at the veracity, you find out that the N50 note circulates more than the smaller ones.”

Lemo also urged law enforcement agencies to arrest all illegal hawkers of new naira notes. He called on commercial banks to keep watchful eyes on their staff to avoid being used as conduit for illegal transfer of new notes to unauthorised hands. He noted that this should be done to ensure effective protection of the currency from abuse. “We have done all we can do in the sense that we have criminalised this in the 2007 Act. It is clear that if you hawk notes, if you abuse the currency, it is a criminal offence and it is punishable. We expect law enforcement agencies to do the arrest. We don’t have power to arrest. We know it is going on,’’ he said.

No More Imported Rice By 2015

THE World Bank has extended the execution of Fadama III programme in Nigeria from three to four years, with the approval of $200 million. Rasaq Salau, southwest Fadama zonal coordinator, said that although the approval was signed in June, its full implementation would begin in January, 2014.

He said the states participating in the programme will concentrate on the agricultural transformation agenda of the federal government. He stated that the programme would involve people who are into production, as well as those adding value by way of branding and packaging of their crops. Salau said the federal government is determined to stop rice importation by 2015, adding that the minister of agriculture has been urged to ensure that only quality rice is produced.

Compiled by Anayo Ezugwu

— Aug. 26, 2013 @ 01:00 GMT

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