Access Bank to raise $1bn Eurobond

Access Bank has released a bond prospectus on the Irish Stock Exchange showing its plans to raise a total of $1 billion under its Global Medium Term Note Program- the amount to be borrowed in this series is yet to be announced.

The road show kicked off today as management will be meeting with prospective foreign investors in the United States and Europe. Access bank currently has two series of Eurobonds – the 7.25per cent July 2017 ($350 million) and the 9.25 per cent JUN 2021 ($400 million).

The earlier will mature on the 25th of July 2017 while the latter is expected to mature on June 24th 2021.

The issuance of a new bond in lieu of the outright redemption of the maturing bond shows the bank’s preference to refinance its $350 million debt despite current high yield.

Analysts believe that Access Bank has sufficient dollar liquidity from its $800 million in off balance sheet swaps to redeem the debt but rather prefers refinancing to further strengthen its foreign exchange balance sheet.

Though refinancing at current yields will definitely push up its interest expense, we believe the potential gains will outweigh the cost.

Additional information on coupon/yield to follow after further details on pricing are released.