United Bank for Africa, one of Africa’s leading financial services institutions has successfully raised a total of N20billion of Tier 2 capital in the first ever completed Naira denominated instrument in Nigeria. The additional capital is to help UBA further strengthen its capital base, enhance capital adequacy ratio, expand distribution channels and infrastructure and further grow risk assets with a view to enhancing its incomes.
UBA Capital Limited, the investment banking subsidiary of United Bank for Africa (UBA) Plc acted as lead issuing House in the exercise. The joint issuing houses involved in the transaction were Greenwich Trust Limited, Stanbic IBTC and BGL Securities Limited. The issue is the first subordinated and unsecured bond in the history of the Nigerian capital market and it is a strong demonstration of the depth of investor confidence in United Bank for Africa and the current banking reforms. It also underscores the leading role of UBA Capital in African capital markets.
The N20billion bond issue is Series 1 of a N400billion Medium Term bond issuance programme approved by shareholders of UBA last year. The bond which was sold solely to Nigerian institutional investors including Pension Funds, banks, Insurance companies and Asset Management companies, attracted nearly N30billion of demand though UBA decided to take only N20billion. The issue which is at Par with a Fixed Rate coupon of 13% payable semi-annually opened and closed on Thursday September 30, 2010. The bond also has a bullet repayment, is tax exempt and will mature in 2017.
The bond will be listed on the Stock Exchange subject to the approval of the Council of the Nigerian Stock Exchange”.
Speaking at the Completion Board Meeting for the bond on Thursday, 30th September 2010, Group managing Director/CEO of United Bank for Africa, Mr Phillips Oduoza said, "As one of Africa's leading financial services institution, UBA is pleased to further strengthen and diversify its capital through a funding initiative of this nature. This is a novel and landmark transaction in Nigeria. In line with our vision to be the Africa's Global Bank, we will continue to partner public and private sectors to assist them to achieve their financial needs in line with our commitment towards supporting the developmental aspirations of Africans and Africa related businesses"
In his remarks , Executive Director /Group Chief Finance Officer , Emmanuel Nnorom said "UBA is delighted that the reforms embarked upon by the Central Bank of Nigeria, the Securities and Exchange Commission as well as other regulators, have started yielding results by deepening the market and enabling UBA to tap the market with new instruments which will benefit our banking system” . Mr Nnorom further thanked investors who embraced the bond for their confidence in the bank as well as the advisers and issuing houses for their professionalism.
On his own part, Amadou Hott, Chief Executive Officer of UBA Capital said "This is a great achievement for UBA and UBA Capital looks forward to replicating such landmark transactions for other financial institutions in Nigeria and the rest of sub Saharan Africa to enable them meet their capital requirement and diversify their source of capital'. This is yet again evidence that Nigeria is moving towards a more sophisticated banking system and capital market”. United Bank for Africa Plc is one of Africa’s leading financial institutions offering universal banking to more than 7.5 million customer accounts. It currently operates in 19 countries including Nigeria, Benin, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Sénégal, Burkina Faso, Guinea, Gabon, Chad, Kenya, Uganda, Tanzania, Zambia, Mozambique, Congo DRC, Congo Brazzaville and Mali.
With presence in New York, London, and Paris as well as other major financial hubs, UBA combines strong local knowledge of Africa and global expertise to connect people and businesses across Africa and the world through retail and corporate banking, innovative cross-border payments, trade finance and investment banking making it the bank of choice for Africans and African-related businesses globally