Nigeria’s GTBank’s $400m debt-repurchase offer records 30.77% success

Nigeria’s Guaranty Trust Bank’s (GTBank) offer to repurchase its $400 million 6 percent notes due 2018 has recorded 30.77 percent success as only $123.066 million in aggregate principal amount of the offer was validly tendered before the deadline.

In a notice released to the Nigerian Stock Exchange (NSE) Wednesday, the bank indicated that it still has $276.934 as outstanding principal of the notes following the result of the offer.

“According to information provided by Lucid Issuer Service Limited (the tender agent) for the offer, $123.066 million in aggregate principal amount of the securities were validly tendered before the expiration deadline and not withdrawn. The outstanding principal amount following the offer is $276.934 million”, the notice stated, adding that no securities were tendered through the guaranteed delivery procedures described in the tender offer memorandum.

The bank informed that the settlement date for the offer is Thursday, October 5, 2017, just as it said it retains the services of Lucid Issuer Service Limited as tender agent and Exotix Partners LLP, J.P. Morgan Securities Plc. and Morgan Stanley & Co International Plc. as dealer managers in connection with the offer

GTBank had on September 25, 2017 launched 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.

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.

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.