Daily Trust (Abuja)

Nigeria: AMCON Set to Redeem N1 Trillion Bonds - CBN

The Asset Management Company of Nigeria (AMCON) would soon redeem N1 trillion bonds to its first four bond holders, Central Bank of Nigeria Governor Malam Sanusi Lamido Sanusi has said.

Sanusi disclosed this in Abuja yesterday at the signing of Memorandum of Understanding (MoU) between AMCON and CBN on bilateral negotiation for repayment of "bad loans" taken by AMCON.

AMCON was established by the CBN to buy off bad loans in the banks in 2009 as part of its banking sector reform strategies.

After taking over the loans, AMCON issued bonds, invested and sold some of the collaterals acquired from the banks to help in settling the loans.

"AMCON is going to pay off N1trillion worth of bonds of entire series 1, 2, 3 and 4 that is held by core institutions outside the CBN.

"In October next year, AMCON is going to write off another N1trillion again, that is series 5 held by banks and other institutions.

"When that is done, the only creditor to AMCON will be the CBN, no one will hold AMCON bonds unless they come to buy from us, we will be the only one to credit AMCON.

"This will now be AMCON owing the CBN and the CBN collecting its money from AMCON recoveries and the sinking funds of the institutions we regulate."

According to him, this development is a positive credit to the economy of Nigeria and that the amount has limited probability of crystalising on the balance sheets of banks.

Sanusi said the MoU represented the outcome of bilateral negotiations between AMCON and the CBN.

"This is aimed at arriving at a structure and pricing of the CBN loan to AMCON that will make sure that this loan is repaid from a reasonable forecast of the cash flows coming from AMCON and the sinking fund.

"Therefore, for this December, it is the first of the two big events, the second comes in December and that I can assure the nation that N1trillion is already with us."

He assured that by Dec. 30, all investors holding series 1, 2, 3 and 4 bonds of AMCON would be repaid.

Mr Mustapha Chikeobi, Managing Director of AMCON, commended the CBN for its support and assured that AMCON would continue to work assiduously to ensure prompt pay off of the bonds.

"I want to thank the CBN for their support. This is your baby and its grown up but we need more support in the years to come.

"We are really happy we got to this point; I think what Nigeria should take from this is that we intend to pay off this debt as soon as possible.

"With everything happening, it is certain that this will not end up as a burden on Nigerian tax payers."

Chikeobi also commended stakeholders and pledged the support of AMCON to the sector.

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