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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