History Made At The London Stock Exchange: Guaranty Trust Bank Get Listed
History was made on Thursday 26th July 29, 2007 at the London Stock Exchange (LSE) as Guaranty Trust Bank Plc’s $750 million Global Depository Receipts (GDR), said to be oversubscribed by 15 per cent gets listed on the exchange.
Luxuriating from the tremendous success of its oversubscribed $350 million Regulation S Eurobond, issued without the guarantee of either the Federal Government or any international financial institution last January, GTBank had few weeks ago announced its intention to list an offering of $750 million Global Depositary GDRs on the LSE.
The listing, which would commence at LSE by 10.am Thursday morning, is the first of its kind to be undertaken by any Nigerian bank on this scale. A third of the offer, amounting to US$250 million, was offered to Nigerian investors while the balance of US$500 million was available to foreign institutional and individual investors. The GDR is a negotiable equity security held and traded in international capital markets; it gives issuers exposure to the global market outside their home market.
The Nigerian tranche of the GDR offering is a unique vehicle aimed at providing Nigerian investors with the opportunity of purchasing a dollar-based international investment. Dividends on GDR holdings will be made in US dollars.
After the listing today, trading is expected to commence on GTBank’s GDRs by 11.am.It was gathered that all the necessary arrangements for the listing of GTBank’s GDR was signed at the offices of law firm of White and Case LLP yesterday.
On hand to witness this historic occasion are the Director General of the Nigerian Stock Exchange (NSE), Dr. Ndi Okereke-Onyuike, her counterpart at the Securities and Exchange Commission (SEC), Mr. Musa Al-Faki, a representative of the Central Bank of Nigeria (CBN), Mr. Ignatius Imala and officials of GTBank led by its Managing Director, Mr. Tayo Aderinokun.
GTBank’s success in the international capital markets in the last six months is unprecedented in the history of the Nigerian banking sector. The Bank had in January this year issued a $350million Regulation S Eurobond without the guarantee of either the Federal Government or any international financial institution. This is the first time since the early 1990s that any Nigerian institution has been this involved in the international capital markets and these achievements are expected to have a positive impact on GTBank’s funding/lending capacity.
The oversubscription recorded in GTBank’s $750 million GDR is a demonstration of the confidence both the local and international investors have in the bank and in Nigeria, which is believed to be the next international destination for investment.
Commenting on GTBank’s GDRs last Monday in Lagos at the formal presentation of the GDR Certificate to the Central Securities Clearing System (CSCS, Musa Elakama, Assistant Director General of the NSE, has said the Exchange was pleased that GTB is making the historic listing, "we wish that other companies would follow suit so that they can raise money in foreign currencies.
"GDR is a derivative instrument issued with receipt, the 3.850 billion shares would be deposited with the CSCS today with a special account created for it," he said. Jide Ogundare, a director and representative of the bank at the occasion, said, "For us, this is a very significant event, it is an end of a process that we have learned a lot from. The GDR which is worth N137.75 billion is the biggest transaction in the market today, we use this opportunity to assure our investors that we will not let them down," Managing Director of the CSCS, Mr. Onyewusi Asinobi, said, "the real certificate would today get to the CSCS. It would be in our depository and any time investors wants confirmation, it would be given."
The Joint Book runners/Global Co-coordinators/International Underwriters of the GDR offer are J.P. Morgan Securities Limited and Morgan Stanley & Co. International Plc, while Afrinvest (West Africa) Limited is the Local Co-ordinator. The members of the Domestic Underwriting Syndicate are Afrinvest (West Africa) Limited, BGL Limited, FBN Capital Limited, First City Monument Bank Plc, Futureview Financial Services Limited, IBTC Chartered Bank Plc, Sterling Capital Markets Limited, Vetiva Capital Management Limited and WSTC Financial Services Limited.
Operating from 104 branches, GTBank is presently rated Triple A (Aaa) by Agusto & Co, the leading domestic rating agency. It is also rated AA- (Double A minus) by Fitch; and BB- (Double B minus) by Standard & Poor’s, the best ratings so assigned by the two international rating agencies to any Nigerian or West African-based bank.
