United Bank for Africa Plc, Nigeria’s lender with operations in 20 African countries, has successfully raised $300 million through its recently announced USD1.5Billion Global Medium Term Note Programme, the bank said in a statement.
The Global Offering represents five-year senior unsecured notes (144A/Reg S) listed on the London Stock Exchange and is aimed at partly refinancing its maturing $500m during June 2022 for which it has opened a tender Offer to willing sellers.
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The 2020 Notes, which now have less than eight months to maturity closed at a yield of 2.57 per cent on Thursday, 11 November 2021, some 2.88% premium to its face value.
The senior notes, rated by both Fitch (B) and S&P (B-), mature in November 2026 and were issued at a coupon of 6.750%, 75bps higher than the debut Offering of UBA in June 2017, partly due to the lower-interest-rate environment.
Notably, UBA prices its $300million Note at 100bps to comparable FGN Eurobond and 550bps credit spread over the equivalent U.S. Treasuries, broadly similar to the credit spread it paid in 2017 when it debuted in the international debt capital market.
Net proceeds from the sale of the Notes will be applied towards the repayment of outstanding debt, UBA explained.
The issuance was arranged by a syndicate of joint lead managers and bookrunners comprising Citibank, Mashreqbank, Renaissance Capital and Standard Chartered Bank. United Capital Plc acted as a Financial Adviser and Joint Bookrunner.
UBA announced the offering on November 8, 2021. Investor interest was global, including the United Kingdom, Europe, Asia, Africa, the Middle East, and the US.
The senior notes were priced on Saturday evening via intra-day execution and the orderbooks were 1.7x oversubscribed.
The successful issue reflects continuing global investor appetite for UBA’s credit and support for the Group’s pan-African strategy.
The Tender Offer on the outstanding $500 million, 7.750% notes due 2022, which was launched alongside this new Issue expires on Tuesday, 16 November 2021.
Citibank, Mashreqbank, Renaissance Capital and Standard Chartered Bank are acting as Dealer Managers on the Tender Offer.
Speaking on the offering, the Group Managing Director & CEO of UBA Plc, Mr Kennedy Uzoka, said: “This successful dollar-denominated offering further illustrates global investor confidence in the strong fundamentals of our Group.
“It is a testament to our customer-first strategy, pan-African growth story, supported by prudent risk management and benchmark asset quality ratios”.
Also commenting on the Eurobond, the Group CFO, Mr Ugo Nwaghodoh, said: “UBA’s successful global offering is another milestone for the Group.
“The new issue further enhances our stable funding base and supports the growth of our balance sheet and our overall business”.
Nigeria’s extrapolated five-year Eurobond currently trades at 5.75 per cent, as the November 2025 and November 2026 FGN Eurobonds closed at yields of 5.29 per cent and 6.15 per cent respectively on Thursday 11 November 2021.
In the United States, the government’s five-year bond has a yield of 1.25 per cent.
On the floor of the Nigerian Exchange, the news of the successful issuance of the Eurobond was received positively by equity investors, with the ordinary shares gaining 3.7 per cent on Friday, 12 November 2021, as it traded up to N8.45 per share.
A total of 2.8million units of the shares were traded before the close of the market.
