Nigeria’s Access Bank Plans Dollar Bond Sale to Fund Expansion
TLDR
- Access Bank Plc, Nigeria's largest bank, plans to issue dollar-denominated bonds to support growth and meet capital requirements.
- Two tranches will be offered: one for development financial institutions and another for the open market, expected to be completed by mid-2024.
- Dollar bonds have become attractive due to high returns and protection against naira devaluation, following the Nigerian government's recent benchmark bond sale.
Access Bank Plc, Nigeria’s largest bank by assets, is planning to issue dollar-denominated bonds in the domestic market to support its growth ambitions and meet central bank capital requirements, Managing Director Roosevelt Ogbonna said.
The bank will offer two tranches: one for development financial institutions (DFIs) and another for the open market. Ogbonna noted that the tranche for DFIs is expected to be completed by mid-2024, using the Nigerian government’s recent five-year, dollar-denominated bond sale as a benchmark.
President Bola Tinubu’s administration issued similar bonds with a 9.75% coupon rate, raising $900 million last month, almost double the anticipated amount. High returns and protection against naira devaluation have made dollar bonds attractive, with the naira down over 70% since June 2023.
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Key Takeaways
Access Bank’s bond issuance aligns with its strategic push to double its non-Nigerian assets and become a leading African lender within five years. The bank operates in 24 countries and plans to expand to the US by 2025 or 2026, with its UK unit opening an office in Hong Kong this month. Amid currency volatility and rising demand for dollar assets, Access Bank’s move reflects a broader trend of Nigerian firms seeking to hedge against naira depreciation and leverage favorable returns. With the Central Bank of Nigeria’s updated capital rules, Access Bank’s bond sale also signals proactive steps to strengthen its capital base while supporting regional growth ambitions.
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