• Friday, March 29, 2024
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First Bank to redeem $450m notes ahead of maturity

First Bank to redeem $450m notes ahead of maturity

First Bank of Nigeria Limited, the largest subsidiary of FBN Holdings, intends to redeem its fixed-rated subordinate note held by its Netherland-based subsidiary FBN Finance Company B.V., two years ahead of maturity, it said Wednesday.

The US$450m, 8% subordinated notes raised from the international debt market are due in July 2021, but the Bank plans to exercise its option to call and pre-pay holders at the next callable date of July 23, 2019, it said in a statement filed to the Nigerian Stock Exchange Wednesday.

A subordinate loan or junior debt is a debt instrument which ranks below other loans and securities in terms of repayment or claims on an asset of the issuer. In events of default, holders of senior debt would be fully settled first before holders of junior debt notes.

According to the tier-one lender, the early redemption demonstrates the bank’s strong financial position.

“This liquidity management exercise demonstrates the strength of the Bank’s foreign currency liquidity and robust capital base,” FBN said in the statement, noting that the move would further enhance the efficiency of its balance sheet.

First Bank of Nigeria is a tier-one lender with over 10 million active customer accounts and more than 750 business locations.

With over 120 years of quality service delivery, the bank has spanned beyond the African continent and currently operates across Africa, Europe, the Middle East and Asia.

First Bank grew net profit in Q1 2019 by 7 percent to N15.79 billion from N14.77 recorded in the corresponding period of 2018.

The improvement in its bottom-line was despite a 2.1 percent ease in net interest income which stood at N 74.18 billion. First Bank was able to record significant gains in other revenue segments.