By Modupe Gbadeyanka
Pan-African lender, United Bank for Africa (UBA) Plc, has declared its intention to launch about $500 million Eurobond aimed.
Proceeds from this is expected to be used for its general banking purposes, the financial institution explained in a statement signed by the Company Secretary, Bili Odum, on Tuesday.
Already, the bank has received “no objection” approvals to the transaction from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
However, the commencement of the transaction, UBA said, would be subject to finalizing transaction documentation and prevailing market conditions.
The $500 million senior unsecured medium term debt notes, according to UBA, should be listed on the Irish Stock Exchange, with the expectation that the Notes would be traded on its regulated market.
It was pointed out in the statement that UBA intends to issue the Notes directly, but will retain the flexibility to substitute the issuer with an offshore special purpose vehicle, where market conditions require and allow for such, prior maturity of the Notes.
“UBA will pay the net proceeds from the Notes issuance into its foreign currency domiciliary account, which may be retained by UBA in foreign currency or converted into Naira, depending on UBA’s requirement from time to time.
“A certificate of capital importation (CCI) will not be obtained in respect of the proceeds of the Notes that are not converted into Naira because a CCI is only issued in respect of capital imported into Nigeria and converted into Naira.
“UBA intends to make principal repayment and interest payments on the Notes from its foreign currency reserves, since it will not be able to obtain access to the Nigerian foreign exchange market for the purpose of making such payments,” the lender explained.
However, it stressed that, “Notwithstanding the foregoing, UBA will obtain the approval of the CBN to access the official foreign exchange market if for any reason UBA does not have sufficient foreign currency reserves to meet the principal and interest payments due on the Notes.”
The statement concluded that, “The bank intends to make announcements today, May 23, 2017, regarding planned investor meetings in Europe and the United states, in respect of the issuance of the Notes.”
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