AMCON LISTS N1.7TRN BOND TODAY

Asset Management Corporation of Nigeria (AMCON) will list N1.675 trillion ($11 billion) Zero Coupon Bonds on the Nigerian Stock Exchange (NSE) today.

According to MBC Securities, a broking firm involve in the listing AMCON completed the bond issuance two weeks ago, attracting yields significantly below equivalent government treasuries. AMCON will issue the 3-year zero-coupon bonds in three tranches.

Earlier, the Asset Management Corporation of Nigeria (AMCON) had postponed the bond issuance because of the delay in getting approval from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). The corporation had also said it was seeking some waivers from the Ministry of Finance and the Debt Management Office (DMO).

It would be recalled that AMCON had issued three-year zero-coupon bonds with a face value of N1.03 trillion to 21 banks last December in exchange for their NPLs and had paid the banks discounted total of N770 billion, in the first round of the purchases. The debt purchases are expected to help resume credit extension by banks.

AMCON had said that it would hold the assets for at least two years before selling them, and when it wants to sell them, the transaction will be announced and publicized so that nothing untoward happens.

AMCON was set up to help recapitalize banks rescued in a $4 billion Central bank bailout in 2009 and to restore the nine ailing banks. It is expected that AMCON will bring the nine rescued banks' negative shareholders fund back to zero before new investors come in, and return them to minimum capital adequacy.

Part of the N500 billion additional bond issues will be used to soak up non-performing loans from banks other than those rescued in 2009. Among the nine rescued banks, Union Bank received the highest amount for its bad loans, more than N200 billion, AMCON said. Oceanic Bank said it also received around N200 billion from AMCON, while Intercontinental Bank said it received over N146 billion and expected additional bonds in a subsequent purchase.

A spokesman for Wema Bank said the bank had received N15.2 billion from AMCON while a source from Bank PHB disclosed the bank got N140 billion in exchange for over N300 billion worth of bad loans.