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Diamond Bank suspends plan to issue bond

by Business News Report

Diamond BankDiamond Bank has suspended the launch of a seven-year $550 million bond because of pricing turbulence in the international debt market, its chief executive Alex Otti has said. Otti said that the bank’s road show to Britain and the United States in June coincided with uncertainties around when the U.S. Federal Reserve will halt the monetary stimulus that has kept global markets awash with cash.
The bank had planned to launch the bond sale in July after a two-week investor road show to update fund managers on the bank and gauge appetite for the issue.
“Our efforts towards injection of Tier II capital have been put on hold following the persisting pricing turbulence in the international debt market,” Otti said in a call with analysts to discuss the bank’s nine-month results.
Shares in Diamond Bank, which have risen by almost 40 per cent since the start of the year, gained 1.3 per cent on Tuesday to close at N6.95. Otti said that the bank was not in any significant danger of a capital shortfall and that he will examine other options to raise funds, including a possible rights issue.
“There are a whole lot of alternatives to explore,” Otti said, adding that the bank had a capital ratio of 17 percent at the end of September, against the 15 percent minimum required by the Nigerian central bank. The bank’s pretax profit in the nine months to Sept. 30 rose 10.2 per cent year on year to N25.6 billion .

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