First Bank at NSE, seeks support for N500b bond offer
Already, according to the NSE boss, institutional investors are gearing up to embrace the bond, which would be flagged off once the approval of regulatory bodies is secured by the bank.
According to Okereke-Onyiuke, the bond would lift the capital market and the economy in general, adding that the step taken by FBN would encourage other banks to follow suite.
“The bond will fly. Institutional investors are waiting for the bond. I am happy about the step First Bank has taken. First Bank has taken good step and I am sure it will be bandwagon effect,” she said.
In his submission, the Group Managing Director of FBN, Mr. Bisi Onasanya said the offer would be flagged off once the approval of the shareholders is secured in an extra ordinary general meeting scheduled to hold later in the year.
He further explained that the proceeds of the bond would be geared towards financing infrastructural development, pointing out that the low level of participation by financial institutions has been the bane of infrastructural development in the country.
Onasanya noted that being a long-term project, it would be wrong to finance infrastructures with depositors money.
Some stockbrokers said the proposed bond would assist in attracting investors to the market and make the primary market active.
First Bank is the first listed company in Nigeria to make a jumbo offer of N100 billion in 2007. The hybrid offer was subscribed to the tune of 147 per cent. The bank was only allowed to absorb N250 billion out of the N472 billion realised from the offer.
The Guardian gathered that no other institution has so far successfully raised such an amount from the stock market.
Union Bank of Nigeria Plc had last year planned to raise about N302 billion through a hybrid offer of public offer and right issue.
However, the offer was cancelled due to the global financial crisis that affected stock markets, including Nigeria.
By Moses Ebosele and Helen Oji