Home » Nigerian banking magnate Jim Ovia’s Zenith Bank pays investors balance of $500 million Eurobond

Nigerian banking magnate Jim Ovia’s Zenith Bank pays investors balance of $500 million Eurobond

by Mfonobong Nsehe
Jim Ovia

Zenith Bank Plc, a leading financial services group led by Nigerian banking tycoon Jim Ovia, has redeemed the remainder of $107 million of its $500-million Eurobond* Notes due May 30, 2022.

The corporate action, which is consistent with the leading lender’s management’s cost-cutting strategies, will be critical in mitigating interest rate and currency conversion risks, which could make borrowing more expensive.

The redemption of the remaining $107 million balance of the $500-million Eurobond Notes falls under the second tranche of Zenith Bank’s $1-billion Global Medium Term Note Program, which was issued in 2017 with a five-year tenor and coupon of 7.375 percent.

The bank redeemed $392.6 million of the notes in September 2019 through a Cash Tender Offer before their maturity date of May 30, 2022.

The redemption of the note is a “further demonstration of its highly diversified and robust funding sources, as well as its impeccable pedigree and track record in treasury management,” according to the bank.

Zenith Bank, Nigeria’s most profitable and valuable financial services group, has a market capitalization of N736 billion ($1.77 billion) and is a leading provider of financial services in Nigeria, as well as an active presence in Anglophone West Africa.

Ovia, a Lagos-based businessman who founded the tier-one bank in 1990, owns a significant 16.2-percent stake in the leading lender worth over N119.2 billion ($300 million).

The bank’s profit increased by 9.7 percent from N53.06 billion ($127.77 million) in the first quarter of 2021 to N58.2 billion ($140.1 million) in the same quarter of 2022, according to its recently published interim financial statement.

As a result of its strong financial performance, the bank’s total assets increased from N8.68 trillion ($20.9 billion) to N10.32 trillion ($24.8 billion), while retained earnings increased from N488.85 billion ($1.18 billion) to N657.67 billion ($1.58 billion), making it one of Nigeria’s most profitable banking brands.

*A eurobond is a debt instrument denominated in a currency other than the market’s home currency. Its issuance represents one of the cheapest ways for companies to borrow funds to fund projects such as expansion into new foreign markets.

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