Nigeria's Diamond Bank to raise $300-$350 mln in 5-year eurobond

Nigeria's Diamond Bank is in the Eurobond market to issue between $300 million to $350 million worth of debt and has started a roadshow to sell the bond, its chief financial officer told Reuters on Tuesday.
"It would be a benchmark issue, anything between $300 million and $350 million," Abdulraham Yinusa said.
Yinusa said the mid-tier lender will also tap equity markets following the debt deal to raise a further $200 million to $250 million to strengthen its capital base.
Shares in Diamond Bank gained 1.09 percent on Tuesday to 6.47 naira. The shares are down 13 percent this year.
Diamond Bank won shareholders' approval in April to raise fresh capital in debt and equity and Chief Executive Alex Otti has said the bank aims to raise up to $550 million.
Citigroup is marketing the Eurobond and has organised roadshows in Britain and the United States. Bankers expect the bond, which has a five-year maturity, to be priced on Wednesday at an 8 to 9 percent yield.
Diamond Bank is targeting a capital adequacy ratio of over 20 percent of assets after the capital injection, from around 17 percent now. (Reporting by Chijioke Ohuocha; Editing by Greg Mahlich)
Nigeria’s banks are tapping Eurobond markets to be in a position to provide financing for projects including power, with Sterling Bank Plc seeking to raise dollars after Zenith Bank, the nation’s second-biggest lender, sold $500 million of five-year notes on April 10. The yield on the security was 6.29 percent yesterday, compared with 5.07 percent in JPMorgan Chase & Co.’s Corporate EMBI Diversified Financial Sector Blended Yield index.
“Nigerian banks will become regular players in the Eurobond market in coming years,” Samir Gadio, an emerging-market strategist at Standard Bank Group Ltd.’s London unit, said in an e-mailed response to questions April 24. “They will need to refinance existing issues before they mature, but also to raise more funding for the financing of power, oil and gas and infrastructure projects.”

Strong Demand

The state’s disposal of its power assets last year attracted about $2.4 billion, with most of the financing arranged by local banks, Wale Shonibare, the managing director of investment banking at Lagos-based UBA Capital Plc, said in a Bloomberg TV Africa interview broadcast April 25.