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AMCON to retire N2tr bonds, refinance another N3.6tr

By on May 20, 2013
chike obi

chike obi

Weeks after the call by a call by the International Monetary Fund (IMF) for a wind down of the Asset Management Corporation of Nigeria (AMCON), its management at the weekend announced plans to refinance its initial N5.7 trillion zero coupon bonds maturing from December 31, 2013 to October 2014.

AMCON had issued three-year tenured zero coupon bonds with a principal amount of N3.9 trillion and a face value of N5.7 trillion in order to fulfill its mandate of acquiring eligible bank assets and recapitalising the banking system, thereby helping to restore the financial system and the economy to full health.

The corporation said in consultation with the Central Bank of Nigeria (CBN), it intends to refinance N3.6 trillion of bonds in a bilateral agreement solely with the CBN on mutually agreed terms, besides retiring about N2.0 trillion of its bonds during 2013 and 2014.

The latest move, which will reduce AMCON’s bond liabilities by about 35 per cent well ahead of schedule, was hinged on the great progress made on recoveries and restructurin, and the extraordinary co-operation of the banks in fulfilling their commitments to the Financial Sector Resolution Fund – Sinking Fund.

As part of the plan, AMCON intends to repay all holders of Series 1 to Series 4 in December 2013 through the payment of cash and liquidity status qualifying instruments held by the Corporation.

The redemption and refinancing, the corporation said, will be in such a manner that is consistent with efficient and effective macroeconomic stability in general and ensuring no monetary policy dislocation.

There will consequently be no other public or private holders of AMCON bonds, just as the corporation also announced on Friday said it has commenced the final process to the full divest of its shares in Enterprise, Keystone and Mainstreet, three banks that were nationalised on August 5, 2011. The three failed to meet the deadline given by the CBN for the eight troubled banks to find suitors, following which they were bridged by the Nigeria Deposit Insurance Corporation (NDIC), with invited AMCON to become new owner.

The process will begin with the sale of Enterprise Bank, the corporation said, urging interested parties to expect details of this sales process within 30 days, followed by the other two to ensure orderly and transparent transactions, all of which would be concluded by the third quarter of next year.

(Daily Independent)