Diamond Bank to list $550m bond on Irish exchange

By The Rainbow

Diamond Bank Plc plans to list its proposed $550 million Eurobond to be launched later this month  on the Irish Stock Exchange, according to an investors' document for the bond.

The proposed 10-year bond will be callable after five years and will be listed on the Irish Stock Exchange.

Nigeria's Diamond Bank expects to launch a $550 million bond next month and hopes for a 10-year maturity, its chief finance officer said on Thursday, noting that its roadshow ended without a deal yet.

The bank plans the bond as part of its overall strategy to raise $750 million to bolster its capital and the capacity to handle emerging big ticket transactions.

The bank ended a two-week investor roadshow to Britain, Switzerland and the United States last week.

The road show was purposed to  update fund managers on the bank and gauge appetite for the issue, CFO Abdulrahman Yinusa said.

'The issue as well as the pricing will happen some time in July. We have only done the roadshow,' Yinusa told Reuters, adding that the bank wanted to raise a maximum of $550 million.

Several emerging market borrowers, including Nigeria itself, have held roadshows in recent weeks, but the U.S. Federal Reserve's talk of winding down its money-pumping programme has kept new issues to a minimum.

Yinusa said the bank had met Goldman Sachs and Fidelity fund managers, among other investors during the roadshow. The roadshow was arranged by lead managers for the bond, France's BNP Paribas and Afrexim Bank.

A banking source said two weeks ago that Diamond Bank wanted to issue the bond at a yield of 6-8 percent, mirroring the 7 percent yield that rival lender Fidelity Bank fetched on its $300 million Eurobond issue in May.

Depending on the pricing and tenor, Diamond could settle for an amount between $300 million and $550 million, Yinusa said, noting that it will issue a minimum maturity of 7 years in order for the bond to qualify as Tier II capital on its books.

In an investors' presentation prepared for the bond seen by Reuters, it said the proposed 10-year bond will be callable after 5 years and will be listed on the Irish Stock Exchange.

Diamond Bank, with a B credit rating and stable outlook from Fitch, has said it intends to use the bond proceeds to fund lending to the oil and gas, power and infrastructure sectors in Africa's second biggest economy.