United Bank for Africa Plc (UBA) has announced plans to issue a 5-year Fixed Rate Senior Unsecured Note, as part of its global medium term note programme.
To facilitate the issuance of the 5-year unsecured note whose value is yet to be ascertained as at the period of reporting this, the financial giant stated that a series of global investor and fixed income investor calls will be held from today, 8th of November, 2021. The calls will be organized by the joint lead managers of the offer, namely: Citigroup Global Markets Limited, Mashreqbank psc, Renaissance Securities (Cyprus) Limited, Standard Chartered Bank and United Capital Plc.
This is according to a notice signed by the Group’s Secretary, Bili Odum, and filed with the Nigerian Exchange Limited (NGX).
The net proceeds that will be generated from the proposed 5-year fixed rate benchmark USD-denominated Regulation S/144A Senior Unsecured offering is most likely to complement the lender’s stable funding base and support the growth of its balance sheet and overall business.
In addition, the tier-1 bank proposed to redeem its outstanding $500 million Eurobond due June 2022, issued at a coupon rate of 7.75%. Consequently, the bank is expected to announce a cash tender offer for all of the outstanding bonds today. Citigroup Global Markets Limited, Mashreqbank psc, Renaissance Securities (Cyprus) Limited, and Standard Chartered Bank are dealer managers for the Tender Offer.
Recall that UBA had in 2017 issued its debut $500 million Eurobond which was oversubscribed by 240%. The offer attracted investors around the world, including the United Kingdom, Asia, the Middle East, Europe and the United States. The bond was listed on the Irish Stock Exchange.
It is imperative to note that Nigerian banks have been leveraging on the international debt market to boost their capital buffers amidst tight FX liquidity and the country’s macroeconomic challenges. Similarly, recall that Fidelity Bank had recently announced plans to raise about $500m from the international debt capital market through the issuance of 5-Year unsecured notes. The firm intends to list the Notes on the Irish Stock Exchange, with the expectation that the Notes will be traded on its regulated market.
In its 2021 9M financial results, UBA reported that its profit after tax grew by about 36% to N104.6 billion. Its net interest income marginally grew by 1.7% to N229.3 billion, while deposits from customers grew to N6.08 trillion during the period.
As of press time, UBA is currently trading N8.50 per share on the floor of the Nigerian Exchange Limited (NGX).