Nigeria’s GTBank yesterday launched a cash tender for its $500,000,000 7.50 percent Eurobond maturing May 2016.
This being the first transaction of its kind in Nigeria would boost the financial strength of the banks as well as its commitment to excellence and best practices.
Consequently, the banks has invited holders of its $500,000,000 7.50% notes or securities due 2016 unconditionally and irrevocably guaranteed by Guaranty Trust Bank plc to tender any and all of their Securities for purchase by the Offeror for cash on the terms of, and subject to the conditions contained in, a tender offer memorandum dated 4 February 2016.
The Bank had to do this to calm the nerves of international bond holders, worried that Nigerian Banks will not be able to meet their dollar obligations in view of the scarcity of dollars.
Through the Offer, the Bank seeks to deploy its available U.S. dollar liquidity to the repurchase of the Securities ahead of the scheduled maturity in May 2016. This liability management exercise allows the Bank to efficiently manage its liquidity by addressing in full debt maturing in 2016. The extent to which this goal can be achieved through the Offer will depend on the number of Securities that will be tendered in the Offer, given the voluntary nature of the Offer. The Bank intends to maintain cash available to repay any outstanding Securities not tendered in full at maturity.
Any Securities purchased by the Offeror will be surrendered for cancellation to the principal paying agent in respect of the Securities.
“We then decided to ask investors who are worried about the dollar illiquidity and perhaps our inability to pay on the bonds in May 2016 to submit their notes for redemption prior to maturity. This offer will be open from the 4th of February to the 10th of February. We will announce results of the tender on the 11th of February and settlement will be on the 16th of February”, Meksley Nwagboh, Corporate Communications, Communications & External Affairs of the banks said.
HOPE MOSES-ASHIKE
