By Ademola Alawiye

The Executive Director, Finance, Asset Management Corporation of Nigeria, Mrs. Foluke Dosumu, said on Friday that the corporation had started a process to gauge investors’ interest in the sale of $195m (N30bn) in bonds.

Bloomberg quoted Dosunmu as saying at a presentation in Lagos that “the bonds are part of AMCON’s Series 1 debt programme of N1.7tn to be issued on April 6. The book building is for price discovery for the entire series and will be concluded on April 5.”

The statement also quoted the Managing Director, AMCON, Mr. Mustafa Chike-Obi, as saying that “the N30bn tranche is the only portion of the Series 1 bonds that is open to the public. The amount is large enough to determine where the price of the bonds should be today.”

AMCON last week said it had bought about N1tn non-performing loans of 22 rescued and non-rescued banks in the second phase of its rescue programme in the banking sector.

Chike-Obi told The PUNCH in an exclusive interview that the corporation had also put plans in place to issue N1.7tn bonds at its completion board meeting in Abuja on April 6.

A road show to this effect held in Abuja on Thursday and in Lagos on Friday.

The managing director had said, “We have bought non-performing loans of 22 banks, worth approximately N1tn at face value, for about N600bn. We are going to issue at this point, a shelf-registration of N3tn, but we are going to issue about N1.7tn bonds on April 6.

“The purpose is to replace the N1.1tn consideration bonds that were issued on December 31, 2010, and to buy the new N600bn NPLs in phase 2.”

Chike-Obi explained that the N3tn shelf registration would allow AMCON to issue more bonds when the need arose.

The corporation had bought about N2.2tn non-performing loans of banks for about N1tn in the first phase of its rescue programme.

The managing director had then told our correspondent, “The end process is that we take delivery of the non-performing loans, and the banks, instead of being stuck with illiquid non-performing assets, have bonds that they will cash as they make new loans, and use the proceeds to fund new loans.

“They can create new portfolio of loans in line with the CBN’s prudential guidelines. And as they make loans, they will be able to fund them.”

Source: Punch