AS the narrative in the Nigerian corporates Eurobond space takes a new turn in 2019, banks have redeemed $1.1 billion worth of outstanding Eurobond notes before maturity so far in 2019, just as stakeholders point fingers at fears of currency devaluation.
According Proshare market intelligence analysis, the banks may be looking to reprice these dollar liabilities in view of a lower global interest rate environment or taking this step because of the fear of a near to medium term naira devaluation.
Early redemptions according to the firm could be more tied to the fears of an imminent currency adjustment that could increase obligations of these banks in domestic currency.
Again, with maturities of most of these Eurobonds scheduled for 2021-2022, the banks are likely pricing the next devaluation to happen any time from 2020.
A Eurobond is an external bond, denominated in a currency not native to the country where it is issued through a syndicate of issuing banks and securities houses.
Records seen by Nigerian Tribune showed that aside from Zenith Bank with $500.0 million and former Diamond Bank with $200.0 million 2019 notes, which were held to maturity and redeemed as at when due in April and May 2019 respectively, market watchers observed that Access Bank’s $400.0 million, FBN’s $450.0 million, and Ecobank’s $250.0 million have all successfully recalled their outstanding notes in June, July, and August respectively.
Notably, Zenith Bank recently announced plans to re-call its outstanding 2022-dollar notes, worth $500.0 million, by September 16, 2019, to bring the total value of early redemptions in 2019 to a whopping $1.6 billion.
and then