Monday, 23 July 2012

Dear Afrinvestor,

Please find below our Note summarizing our thoughts on the recent Access Bank Eurobond Offering

Access Bank Plc recently concluded its US$350.0m five year Eurobond debut issue via its subsidiary Access Finance BV (“the Issuer”). Market information indicates that the issue was significantly oversubscribed, while the notes have already started trading in an active “grey” secondary market.  

These new Notes due 2017 rank attractively at current levels against emerging market peers. The relative cost of funds of this offering is a pointer to the Access Bank brand strength and current market position, following the banks Merger of the Intercontinental Bank Group on 23 January 2012, creating a unified business operation that currently plays in the Nigerian top-tier banking space.

Overall, we expect the yield to maturity to settle around the 6.25%- 6.35% region in the medium term which will make a perfect exit point for investors (implied price range of US$104.86-US$105.30). We equally see value for investors that want to hold the issue till maturity as the yield will also guarantee appreciable cash flows for the duration of the instrument.

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