Relief may soon come the way of Nigeria’s foreign exchange-starved economy, following the successful raising of $300 million by Access Bank Plc via a Eurobond from the international market recently.

The acceptance of the bank’s offer is expected to spur other Nigerian lenders to raise dollar-denominated debt, as well as pave the way for the federal government’s proposed $1 billion Eurobond issue expected to be floated before the end of the year.

In addition, it is expected to result in improved inflow of foreign exchange into the economy, thereby boosting economic growth.

The Access Bank issue has a maturity date of October 2021 and a coupon rate of 10.5 per cent. The Eurobond issue made the bank the first Nigerian lender to raise a bond from the international market since 2014, despite the country’s macroeconomic headwinds.

The bank said the successful outcome of the bond demonstrated its strength, resilience   and international endorsement.

Indeed, it has also helped in strengthening confidence in the Nigerian banking system as well as the economy in general.

Fitch Ratings recently warned that the sharp rise in the level of non-performing loans (NPLs) in the Nigerian banking industry, as a result of the tough macroeconomic environment could lead to the downgrade of the financial institutions. Banking sector NPLs rose to 11.7 per cent at the end of June 2016.

Fitch also expressed concern about weakening capital adequacy ratios for banks.

Also, the Central Bank of Nigeria (CBN) had said it was expecting continued deterioration across banks’ oil and gas portfolios during the second half of 2016, as the sector faces sustained low oil prices and production disruptions.

Source: Thisday