• Monday, July 22, 2024
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Fidelity Bank settles $400m Eurobond due Monday

Kenyans ditch dollars as local currency rallies most in 16 years after Eurobond sale

Fidelity Bank has sent $421 million to settle a Eurobond due Monday, as Nigeria grapples with a worsening foreign exchange crisis.

Lagos-based bank transferred the sum on Oct. 13 for the settlement of the five-year, dollar-denominated bond issued in 2017 with a coupon of 10.75%, according to a document seen by Bloomberg and confirmed by the lender’s head of investor relations, Samuel Obioha. The remitted amount includes the due coupon payments for six months, Obioha said.

The repayment comes as lenders in Africa’s largest economy struggle with the effect of a strengthening US currency, restricting dollar transactions on their local-currency debit cards.

Read also: Nigeria’s Eurobond hit after finance minister’s debt revamp comment

The central bank had to step in to provide dollars last month after international airlines struggled to get greenbacks from lenders to repatriate their profits, raising the prospect of them canceling flights to Nigeria.

Fidelity has a $400 million, five-year Eurobond maturing in October 2026, the yield on which is currently about 15%, compared to 7.875% when issued.

With yields like that, Fidelity has no immediate plans to issue another Eurobond, according to Obioha. “We will access the market anytime the market conditions align with our business needs,” he said.