FCMB Suspends Eurobond Sale Citing Unfavorable Market

FCMB Group Plc (FCMB), the Nigerian lender that bought bailed-out FinBank Plc three years ago, suspended a planned Eurobond sale, citing an unfavorable market, and opted instead to borrow funds from a group of banks.
FCMB had considered raising $300 million in a bond sale, according to the Lagos-based lender. The bank suspended the plan and has borrowed the amount from international lenders at an average interest rate of 4 percent, “below the Eurobond’s rate,” it said in an e-mailed statement today.
The bank intends to increase lending by about 20 percent to 540 billion naira ($3.3 billion) this year, joining local rivals in raising debt so that it can expand credit to consumers and fund infrastructure in Africa’s largest economy, Chief Executive Officer Ladi Balogun said June 23. FCMB acquired FinBank in 2011, one of eight lenders rescued by the Central Bank of Nigeria during a debt crisis in 2009.
The newly arranged loans, which have terms of two to eight years, “will provide lending to telecommunications, power and infrastructure projects,” the bank said today. The lenders include International Finance Corp., Citigroup Inc, Overseas Private Investment Corp. and the European Investment Bank, it said.
FCMB’s first-half profit rose to N9.58 billion from N9.28 billion a year earlier, it said in a July 25 filing to the Nigerian stock exchange (0140906D:US). Net interest income rose 20 percent to 32.36 billion naira. The lender is targeting a return on equity of 15 percent this year and 20 percent in 2016, compared with 13 percent in 2013, according to Balogun.

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