Nigeria’s GTBank launches invitation to repurchase $400m debt

Nigeria’s Guaranty Trust Bank (GTBank) has indicated that it is seeking to deploy dollars to repurchase its $400 million 6 percent notes due 2018.

In a notice released to the Nigerian Stock Exchange (NSE) Monday, the bank indicated its intent to launch an invitation to holders of its $400 million 6 percent notes due 2018, to tender all or any of the notes in exchange for cash.

“Kindly be informed that GTBank intends to launch an invitation to holders of its US$400 million 6.0 percent Notes due 2018 (the Notes) to tender any and all of their Notes for purchase by GTBank in exchange for cash (the offer),” the notice said.

The bank said it seeks to deploy its available US dollar liquidity to the repurchase of the notes ahead of the scheduled maturity in November 2018, adding that the commencement and settlement dates for the offer are September 25, 2017 and October 5, 2017 respectively.

It said the extent to which the goal could be achieved through the offer will depend on the number of the Notes that would be tendered in the offer, given the voluntary nature of the offer, and that Notes purchased during the offer will be cancelled.

To this end, bank has appointed Lucid Issuer Services Limited as tender agent and Exotix Partners LLP, JP Morgan Securities Plc and Morgan Stanley and Co International Plc as dealer managers to the offer.

According to the notice, the bank launched the offer in order to efficiently manage its debt. The bank may have decided to purchase the notes in order to take advantage of the current dollar liquidity.

The Central Bank of Nigeria (CBN) has relaxed restrictions in its FX policy, which were imposed last year due to increasing oil prices and a recovery of lost crude oil production volumes. A crash in crude oil prices and production volumes, lead to a sharp devaluation of the naira against the dollar and a foreign exchange crisis.

At close of Monday trading on the floor of the Nigerian Stock Exchange (NSE), GTBank shares closed N39.50 down 0.25%. The bank recently declared an interim dividend of 30 kobo per share for the half-year ended June 2017.

Gross earnings increased from N209 billion in 2016 to N214 billion in 2017. Profit before tax increased from N85 billion in 2017 to N101 billion in 2017. Profit after tax increased from N71 billion in 2016 to N83.6 billion in 2017.