The Asset Management Corporation of Nigeria says it has completed the scheduled repayment of N976bn worth of bonds, allaying fears that it will take a toll on the economy.
The corporation said with the payment, it had successfully retired about N1.9tn worth of bonds issued three years ago, adding that the Central Bank of Nigeria was now the only holder of its outstanding debt obligations.
AMCON, which was created after the banking crisis of 2009, recently began the sale of the three bridge banks namely, Enterprise Bank, Mainstreet Bank and Keystone Bank, which assumed the assets and liabilities of three nationalised banks.
Proceeds from the sale of Enterprise and Mainstreet banks constituted part of the money used for the redemption of the bonds. Keystone Bank will be sold next year.
AMCON had in December 2013 redeemed its issued Series I, II, III and IV bonds, which were worth N1tn.
The corporation has now fully retired N1.874tn of all bonds issued since inception, which puts it ahead of the planned redemption schedule, as all its publicly held bonds have been redeemed before the end of its fourth full year of operations.
The corporation had issued zero coupon bonds, with a face value of N5.67tn as series I, II, III, IV and V between December 2010 and December 2011.
The series V redemption was financed by utilising AMCON’s internally generated cash flows and the Banking Sector Resolution Trust Fund (the sinking fund), which is funded by annual contributions from the Deposit Money Banks and the CBN.
AMCON noted that the collaboration and support of the CBN was critical in ensuring the success of the process.
Industry analysts had expressed concerns over the redemption of the N976bn zero-coupon series V bonds due October 2014 at par, saying it would heighten liquidity in the system.
The Managing Director and Chief Executive Officer, AMCON, Mr. Mustafa Chike-Obi, who noted that the responsibility for managing liquidity in the Nigerian financial system lied solely with the CBN, said steps had been taken to prevent any negative effect.
He said on Tuesday in Lagos at the presentation of the completion certificate to the registrars, “What we have sought to do is to make sure that they (CBN) were fully aware of this payment. We have been having meetings with the CBN for the last three months, and so, the CBN is fully aware of this payment.
“I will point out that much of this payment was in treasury bills in order to manage the liquidity. And we have full confidence that the CBN has taken every step to make sure that this is not an event that will hurt the economy.”
The Executive Director, Finance and Corporate Services, and Chief Finance Officer, AMCON, Mrs. Mofoluke Dosumu, said, “The redemption represents a major milestone in the reduction of AMCON’s obligations, as it signifies the retirement of all AMCON bonds held by the public markets.
“We will continue to make good progress with respect to our obligations to the Central Bank of Nigeria, presently the sole holder of AMCON’s outstanding debt obligations.”
Punch
