Access Bank’s N30bn Tier 2 Bond issuance gets CBN ‘No Objection’, SEC approval

Access Bank plc has concluded the process for the issuance of a N30 billion Tier 2 Bond due 2026. The bank in an August 2 notice told the Nigerian Stock Exchange (NSE) that the Central Bank of Nigeria’s ‘No Objection’ to the Bond issuance as well as the Securities and Exchange Commission’s approval have been obtained.

The bank last week announced that it successfully issued a Tier II N30 billion Fixed Rate Subordinated Unsecured Bond to further strengthen its funding base. The bond was oversubscribed by N13.6 billion, which further buttresses the confidence investors repose in the bank.

Access Bank will undertake a listing of the Bond on the NSE, the bank told the investing public in a notice signed by its company secretary, Sunday Ekwochi. The Issuing Houses are Chapel Hill Denham Advisory Limited as the mandated Lead Issuing House and Coronation Merchant Bank Limited and First-ally Capital Limited as the mandated Joint Issuing House.

Ayodeji Ebo, managing director, Afrinvest Securities Limited, believes in the suc

cess of the Bond, saying there are not many banks issuing local bonds. He sees the move by Access Bank as an effort to shore up its capital after it spent huge amount of money to acquire Diamond Bank. The acquisition deal, which started in December 2018, gulped over N72.5 billion ($200 million).

“We are a bank with a rigorous and disciplined capital plan and the action taken today is in line with our fiveyear strategic plan. This is to ensure a strong capital buffer at all times and support our low risk appetite,” Herbert Wigwe, group managing director/ceo, Access Bank plc, said on the Bond issuance.

“Following the merger, we identified some synergies and combined with this issue, we are confident of our capacity to attain the next level of being a more efficient bank,” he said.

Banks are required to maintain a minimum regulatory capital adequacy ratio (CAR) of 10%/15%1 on an on-going basis. The CBN will take into account the relevant risk factors and the internal capital adequacy assessments of each bank to ensure that the capital held by a bank is commensurate with the bank’s overall risk profile.