Aluko & Oyebode (the “Firm”) is delighted to have advised Access Bank Plc (the “Bank”) in connection with its successful issuance of US$500 million Basel III compliant Perpetual Non-Call (9.125% Rule144A/Regulation S) Additional Tier 1 Eurobond Notes (the “AT1 Issuance”), which have been admitted to trading on the International Securities Market of the London Stock Exchange.
The AT1 Issuance, which is the first to be issued by a Nigerian bank, was constituted under the Bank’s updated US$1.5 Billion Global Medium Term Note Programme. It was significantly oversubscribed, with demand emanating from institutional investors across Africa, the United States, Europe, Middle East, and Asia.
Key features, among others, which make Additional Tier 1 capital unique are that (i) they are perpetual, with no maturity date, step-ups, or other incentives to redeem and (ii) they may be callable upon the initiative of the issuer after a specified timeframe. The proceeds of the AT1 Issuance sought to enhance the Bank’s tier 1 and total capital ratios, ahead of the implementation of the Basel III framework in Nigeria, pursuant to a circular issued by the Central Bank of Nigeria (“CBN”) on regulatory capital.
The transaction is especially notable in that it was conceptualised and implemented against the backdrop of a regulatory environment with Basel II in effect; although, the CBN had signalled an inclination to transition to Basel III once the impact of the COVID-19 pandemic had subsided. Given this, the Bank had to navigate a complex and fast-evolving regulatory framework, while transaction advisers had to design the AT1 Issuance to meet the Bank’s strategic and growth ambitions, as a systemically important bank in Nigeria. The Firm is proud to have advised the Bank on all relevant touchpoints of this issuance, which will undoubtedly contribute to unlocking even more innovation and depth in the Nigerian capital markets, while simultaneously enhancing linkages with the international capital markets.
Commenting on the successful completion of the transaction, Olubunmi Fayokun, Senior Partner and Head of the Firm’s capital markets practice, said: “Access Bank Plc’s status as one of Nigeria’s leading banks is reinforced by the completion of this landmark transaction, which sets the pace for other financial institutions in the Nigerian market and indeed in the African continent. We at Aluko & Oyebode are happy to continually provide cutting-edge legal services and support to our clients as they execute increasingly innovative transactions.”
The Firm’s transaction team was led by Capital Market Partners, Olubunmi Fayokun and Ajibola Asolo, with Associates, Abisola Akinyemi, Kareemat Ijaiya, and Gregory Yinka Gregg.