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UBA Bond lifts NSE’s debt market capitalisation to N5.564tn

By on April 14, 2015

The listing of United Bank for Africa(UBA) Plc’s N30.5 billion  on the Nigerian Stock Exchange (NSE) lifted the debt sector of the exchange to N5.564 trillion of the exchange.

Prior to the listing of the UBA bond, the market capitalisation stood at N5.520 trillion. However, the N30.5 billion UBA bond combined with the N12.95 billion bond of African Development Bank boosted the capitalisation of the debt sector from N5.520 trillion to N5.564 trillion. The UBA Plc’s  bond (Series 1) 7 years 16.45 per cent fixed rate subordinated unsecured notes, was a dual listing on the NSE and FMDQ OTC Plc.

Listing on the NSE provides opportunity for retail investors to take advantage of the fixed return on the investment grade Notes, through the primary market whilst listing on the FMDQ will provide a secondary market platform for institutional and foreign investors to trade the UBA bond.

UBA, in December 2014, successfully raised N30.5 Billion Tier-II Capital through the issuance of Seven-Year Fixed Rate Unsecured Notes, maturing in 2021.

Speaking on the listing, Group Managing Director/Chief Executive Officer, UBA  Plc, Mr. Phillips Oduoza,  “We were the first Nigerian bank to do an Initial Public Offering (IPO) on the NSE after successfully listing in 1971. We were also the first to issue Global Depository Receipts (GDR) in 1998. We are always willing to explore new frontiers in our quest to have an efficient market that meets our developmental needs.”

According to him, the bank is committed to building a long term and sustainable business that it will ensure proper utilisation of the bond issue  which will in return grow market share and profitability guided by a robust risk management framework and strong corporate governance.

Also speaking, the Group Chief Executive Officer of United Capital Plc,issuers to the bond, Mrs. Oluwtoyin Sanni said, “The bond issue was the biggest and most successful in 2014. The success recorded at a time of uncertainty in the capital market was largely due to the credibility and strength of the UBA brand.”

According to her, the bond was closed in a record time of three months despite the weak investment sentiments in the capital at that time.

“This is  a pioneer corporate bond dual listing in Nigeria as this is  the first time of having a corporate bond listed on the NSE platform as well as FMDQ OTC platform, thus fostering  proper pricing of the bond.The UBA  bond has increased the investment vehicles open to investors in the capital market,” she said.

According to Sanni, United Capital Plc will build on its strong, diversified platform to drive further growth and deepening of the capital market by continuously structuring and packaging transactions that will provide investment opportunities to potential investors in the capital market.
Highlighting  the competence of United Capital Plc, Sanni disclosed that the company, was involved in about 80 per cent of the state government bond issuance in 2014.

“United Capital led and structured the largest corporate bond in West Africa (N37.5 – Flour Mills of Nigeria Plc). The company was lead issuing house on one of the two  IPO deals in the capital market in 2014. United Capital was Joint Bookrunner in the first ever floating bond to be indexed against the FGN Treasury Notes,” Sanni said.

 

[ThisDay]