Investors offer $1.6bn for Access Bank’s $500m Eurobond
Access Bank on Wednesday announced that it has successfully issued a $500 million Senior Unsecured Eurobond from the international debt capital market, as part of its Global Medium-Term Note Programme.
Investors were willing to subscribe to the $500 million Access Bank sought to raise with $1.6 billion, more than three times the value issued by the lender.
As a result, investors’ confidence in lender’s ability to pay at maturity earned the bank a record as the first to attract the largest order book ever for a Nigerian bank Eurobond transaction.
“The success of our $500 million senior unsecured Eurobond is yet another stride towards the realisation of that vision and underscores our investors’ confidence in the Access Bank story,” the Group Managing Director of Access Bank, Herbert Wigwe, said.
The senior Eurobond 5-year unsecured note (144A/RegS), which was sold under the bank’s $1.5 billion global medium-term note programme, was issued with a yield and coupon of 6.125 (approximately 6.13) per cent with interest payable semi-annually in arrears.
Listed on the main market of the London Stock Exchange, the 5-year unsecured bond will mature in September 2026.
According to Access Bank’s disclosure, “The transaction saw a significant demand from top-quality investors globally including the United States, Europe (including the United Kingdom), Middle East, Asia and Africa, anchored by a number of large tickers.”
The net proceeds of the Eurobond, according to the lender, will provide medium-term funding and help to enhance the capacity of the bank to support its general banking purposes.
Recall that Access Bank recently launched an African expansion strategy to accomplish its vision to be the World’s Most Respected African Bank.
The tier-one lender recorded its highest half-year profit in nine years in the second quarter of 2021 on the back of increased interest income fueled by the growth in corporate and retail value chains.
Its profit grew by 42.45 percent to N86.94 billion in the financial period ended June 2021 from N61.03 billion in the comparable period of 2020.
Access Bank’s retail banking business continued to grow with a 24percent year-on-year increase in gross earnings to N118.6billion (H1 2020: N95.8billion), driven by a 58.52 percent year-on-year increase in Interest Income and 37percent year-on-year growth in revenue from other channels and digital businesses.
This feat was achieved through Access Bank’s unique business model that supports the corporate and retail value chains throughout the African continent and beyond.
With improving profitability, resilient capital position and a robust, diversified balance sheet, the Group said it’s on track to deliver on its vision to be the World’s Most Respected African Bank.
Despite the inflationary environment and increased regulatory costs, the bank’s Cost-to-Income Ratio stood at 60.1percent, a 570-basis point reduction from 65.8percent in H1 2020.
During the period, the bank recorded progress in its financial inclusion objective to bank 1 in every 2 Nigerians. It added 2,371,832 new customers as well as 16,428 new agents, creating more employment and providing convenience to customers.
These strides in the bank’s retail business resulted in growth in savings deposits to N1.4trillion, a 4percent growth from N1.3trillion in December 2020, and a Cost of Funds reduction to 2.9percent (H1 2020: 3.7percent).