Equities’ investors risk losing dividends over banks’ Eurobonds

The prevailing high domestic interest rate which has spurred banks’ increased appetite for external borrowings through Euro-bonds has become a source of worry to capital market operators.

The operators urged the government to maintain stability in exchange rate to enable them to service their obligations and avoid impact of such borrowing on equities’ investors dividends.

Due to the collapse of the equities primary market and the high cost of issuing long-term domestic debt, four Nigerian banks have devised alternative means to access cheaper long-term funds from the international capital market. They plan to raise over $3 billion to close the gap in their foreign currency balance sheet.