dollar-denominated loans, particularly Eurobonds, as the naira keeps on increasing in value.
It was
learned that banks were currently positively arranged to raise dollar loans
taking after the making of the Investor and Exporters FX window by the Central
Bank of Nigeria and the subsequent appreciation of the naira.
Another
reason the banks are thinking about Eurobonds, according to top banking
sources, is on the grounds that some of them are taking a look at
re-negotiating their dollar loans, which will soon begin falling due.
The top bank
official stated, "Many banks must choose between limited options than to
raise dollar loans or Eurobonds incompletely to re-negotiate their Eurobonds
falling due, or to exploit the gratefulness in the naira value to raise dollar
funding."
While
Guaranty Trust Bank Plc's $400m Eurobond is expected in November, Fidelity Bank
Plc's $300m is expected next May. Access Bank Plc has $350m of bonds due in
July.
GTBank has
said it has no arrangements to issue new Eurobonds, yet Fidelity Bank and
Access Bank presently can't seem to choose.
Monetary and
financial expert concur that the banks will begin to raise dollar-denominated
loans.
All things
being equal, more banks will issue Eurobonds in light of the fact that they
require dollars to offer advances in the United States cash or to repay debt,
an investigator at Vetiva Capital Management Limited, Mr. Lekan Olabode, told
Bloomberg, including that more banks would issue Eurobonds, in light of the
fact that they required dollars to offer loans and to repay debt.
As of now,
Ecobank Transnational Incorporated has said it is wanting to raise $400m
five-year convertible security this month to renegotiate debt and provide
short-term bridge funding to non-performing loans at its Nigerian unit.
Experts
trust more banks will raise dollar credits this year and next year.
Officially,
United Bank for Africa Plc has brought $500m up in its first Eurobond deal.
It issued
the bond on June 1. This took a comparable issue seven days prior by Zenith
Bank Plc in an arrangement that was four times oversubscribed.
It is hard
on putting a figure to what the normal dollar loans will be yet analyst trust
that as the I and E FX window keeps on enhancing, more banks will exploit to
raise additional dollar loans.
The CBN on
Thursday said its currency window for investors had dealt with $2.2bn of
exchange a month and a half.
It likewise
said it represented just about 30 percent of the $2.2bn exchanges, adding this
was intended to keep the window working.
The CBN had
around 6 weeks back made the Investors and Exporters FX Window to attract
foreign investors and at the same time maintain a strong currency to ward off
inflation.
Experts have
praised the activity as a stage in the correct direction.
In any case,
some few experts, including a former Governor of the CBN, Prof. Charles Soludo,
said despite the fact that the activity, among others taken by the controller
lately, had propelled the forex showcase by 10 stages, there was a need to find
a way to get the economy to where it should be.
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