FNBB pays back P180m debts early
Brian Benza | Friday November 11, 2016 16:00
In a statement, the country’s largest bank by assets gave notice to exercise its option for the early redemption of two bonds totalling P179.5 million that were supposed to mature in 2021. “First National Bank of Botswana Limited gives notice to exercise its option for the early redemption of the FNBB 002 and FNBB 003 subordinated unsecured notes, having an aggregate nominal amount of P154.48 million and P25 million respectively maturing on December 1, 2021. The early redemption will occur on December 1, 2016, as per the provisions contained in the programme memorandum issued in respect of the Notes, dated December 1, 2011,” said the bank.
FNBB says the Bank of Botswana consented to the early redemption of the Notes on September 26, 2016 and the Botswana Stock Exchange was notified of the early redemption of the Notes on October 21, 2016.
Although the bank did not give reasons for the early redemption, market analysts believe while interest rates have also come down, the early redemption also portrays them in good standing in terms of capital needs. “Early redemption is normal and it’s good because in mature markets they perceive non-redemption as a sign of trouble for your capital needs. Additionally, rates have come down a cumulative 200 basis points since 2015 and thus the reference rate has reduced, making a re-issuance for capital cheaper – that is why there is the redemption and the re-issuance,” said an analyst with a local asset management company.
The bonds are part of a P1 billion Notes floated by the bank five years ago.