AMCON Gets Approval for 2nd Phase Loan Purchases

The Asset Management Corporation of Nigeria (AMCON) Monday  said it has received all the necessary regulatory approvals to float the earlier postponed N1.5 trillion fully tradeable bonds by the end of March.

Chief Executive Officer and Managing Director, AMCON, Mr. Mustapha Chike-Obi, made this remark in a chat with Reuters Monday.

The Asset Management Corporation of Nigeria (AMCON) had earlier postponed the bond issuance because of the delay in getting approval from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). The corporation had also said it was seeking some waivers from the Ministry of Finance and the Debt Management Office (DMO).

Chike also revealed that the corporation would invite the management of non-rescued banks to start submitting their Non Performing Loans (NPLs).

He stated that the corporation was now set to soak up  the remaining bad loans of N20 million ($130,500) and above by March 31. He reiterated that the corporation plans to issue additional N500 billion bonds to complete the transaction.

Chike-Obi insisted that AMCON was on track to recapitalise the nine rescued banks by the end of June, as planned.

He said: "We are sending out notices Tuesdays in which we would invite the healthy banks to submit non-performing loans with a face value of N20 million and above."

According to the AMCON boss, the corporation is set to start the second round of toxic asset purchases from the banking sector, adding that AMCON is on track to soak up all bad credit by the end of next month.

"I have two hard deadlines; the end of first quarter for taking out all the NPLs and the end of second quarter for recapitalising the banks," he added.

Chike-Obi said AMCON had received all necessary regulatory approvals to issue fully tradeable bonds by the end of March.

The bonds it has issued so far have been consideration bonds pending the approvals and will now be converted to listed debt

It would be recalled that AMCON had issued three-year zero-coupon bonds with a face value of N1.03 trillion to 21 banks last December in exchange for their NPLs and had paid the banks a discounted total of N770 billion, in the first round of the purchases. The debt purchases are expected to help resume credit extension by banks. 

AMCON had said that it would hold the assets for at least two years before selling them, and when it wants to sell them, the transaction will be announced and publicized so that nothing untoward happens.

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