BusinessDay 24 May 2017

4 BUSINESS DAY
C002D5556
Wednesday 24 May 2017
NEWS
UBA to launch $500m Eurobond
… Gets Fitch ratings as CBN, SEC give ‘No Objection’ approvals
IHEANYI NWACHUKWU
The United Bank for Africa
Plc (UBA) has notified
the investing public of
its intention to launch
up to $500million senior
unsecured medium term debt
notes (Eurobond).
Fitch Ratings has assigned an
expected rating of ‘B (EXP)’ to the
United Bank for Africa Plc proposed
senior unsecured medium-term
notes. The bank plans to raise between
$350 million and $500 million
of fixed-rate five-year bonds.
UBA intends to use 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 to the
maturity of the notes.
The bank intends to list the
notes on the Irish Stock Exchange
(ISE), with the expectation that the
notes will be traded on its regulated
market.
Already, the Central Bank of Nigeria
(CBN) and the Securities and
Exchange Commission (SEC) have
given “No Objection” approvals to
the transaction.
The bank intended to make announcement
yesterday, May 23, regarding
planned investor meetings
in Europe and the United States, in
respect of the issuance of the notes.
The commencement of the
transaction will however be subject
CBN vows more dollar supply to help end...
Continued from page 1
the fourth quarter of 2016 and
a revised 0.67 percent contraction
in the comparable first quarter of
2016.
“The CBNs intervention will
be more rigorous and intense by
making foreign exchange more
available to all sectors of the Nigerian
economy,” CBN Governor
Godwin Emefiele, said in a news
briefing on the outcome of the twoday
Monetary Policy Committee
(MPC) meeting in Abuja.
“I still hold the position that by
the end of the third quarter of 2017,
we will be out the recession.”
The MPC also voted to retain the
Monetary Policy Rate (MPR) at 14
percent, Cash Reserve Ratio (CRR)
at 22.5 percent, as well as Liquidity
Ratio at 30 percent.
They maintained the asymmetric
corridor around the MPR
to finalising transaction documentation
and prevailing market
conditions.
UBA intends to utilise the net
proceeds of the notes for its general
banking purposes, stating that it
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 the bank’s requirement
from time to time.
The United Bank for Africa
Plc further said in a statement to
investors at the Nigerian Stock
Exchange (NSE) that a certificate
of capital importation (CCI) will
not be obtained in respect of the
proceeds of the notes that are not
converted into naira, noting that
a CCI is only issued in respect of
capital imported into Nigeria and
converted into naira.
UBA intends to make principal
repayments 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.
Notwithstanding the foregoing,
L-R: Haruna Jalo-Waziri, executive director, business development, Nigerian Stock Exchange (NSE); Funso Akere, chief
executive, Stanbic IBTC Capital; Tola Akinwunmi, real estate debt structuring and advisory, Stanbic IBTC Capital, and Chris
Godman, executive managing director, equity capital market, standard Bank international, at the Real Estate Investment
Trust Conference co-sponsored by Stanbic IBTC in Lagos.
Pic by Pius Okeosisi
unchanged at +200 and -500 basis
points.
Emefiele said the policy retention
is intended to allow the existing
policies to fully achieve their
goals and objectives.
Africa’s largest economy derives
more than 90 percent of its export
earnings and 60 percent of its fiscal
revenue from oil and gas proceeds.
Nigeria is still undergoing a
severe economic alignment in the
context of lower oil prices, which
has resulted in reduced US dollar
supply and lower GDP growth,
Moody’s Investor Services said in
a recent report.
“The constrained US dollar
supply continues to hurt corporates’
operations and profitability,
especially those affected by a ban
on accessing Nigeria’s official
foreign-exchange markets for purchases
of certain imported items,”
Moody’s said.
About $1.1 billion has flowed
through the new importers and
exporters (I & E) FX window in
the last four weeks, with the CBN
intervention in that segment of
the market at less than 30 percent,
Emefiele said.
The rest were made up of nonoil
exporters and Foreign Portfolio
Investments (FPI), according to
Emefiele.
Investors are gradually returning
through the I & E window
to play in Nigeria’s equity and
bond markets, according to Bayo
Adeyemo, country treasurer and
markets head at Citi Bank Nigeria.
“Things have improved and it
is now up to the CBN to stay the
course and allow more transparency,
as there is room for more
flows to come in.”
The I & E foreign exchange
window closed trading at N382.31
per dollar on Tuesday, data from
the FMDQ show.
Although the GDP contraction
Continues on page 33
may weigh heavily on sentiment
moving forward, it should be kept
in mind that it remains the best
performance seen in four quarters,
said Lukman Otunuga, Research
Analyst for FXTM.
“With many sectors of the Nigerian
economy turning positive,
the overall outlook still looks encouraging
with the bullish impacts
likely to be realised in the second
and third quarter of this year.”
Emefiele noted in his statement
that the MPC is particularly
pleased with the gradual fall in inflation,
which moderated, marginally
to 17.24 percent in April as
against 17.26 in March 2017.
On the financial stability outlook,
the committee noted that in
spite of the banking sector resilience,
the weak macro-economic
environment continues to exert
pressure on the system.
The Committee therefore urged
the CBN to intensify surveillance
to tackle emerging vulnerabilities.
FG says new
executive orders
will be enforced
…as it reconsiders
replacement of PenCom DG
ELIZABETH ARCHIBONG
The Federal Government says
already existing civil service
laws will be invoked to ensure
that the executive orders signed by
Acting President Yemi Osinbajo
last Friday are followed to the letter.
Government also intends to
work on changing the orientation
of Nigerians, Presidential Media
Aide, Laolu Akande said during
a midterm press briefing to commemorate
the second anniversary
of the Buhari administration.
Briefing alongside Presidential
Spokesman, Femi Adesina and
Garba Shehu, Akande noted that
since the orders will be driven
mostly by officials of the Ministries
Departments and Agencies of the
government, the existing laws
would be met with sanctions if anyone
tried to go against the orders.
Already, Acting President Osinbajo
will on Wednesday meet with
about 2,000 public and civil servants
to interact and ensure they
understand the role they play in
the implementation of the orders.
“There are rules in the civil
service and these rules will be invoked
if anyone tries to go against
the orders.
“The Acting President is meeting
with 2,000 public and civil
Continues on page 8
It also asked the banks to step
up credit to the private sector to
support economic recovery and
convey a positive feedback to the
financial system.
Ayodeji Ebo, Managing Director,
Afrinvest Securities limited said
The MPC’s decision was broadly in
line with expectation and analysts’
consensus.
“We expect the renewed investor
sentiment in the Nigerian
capital market will be sustained as
the CBN has reaffirmed its commitment
to ensure the dynamics
of demand and supply play out in
the I&E FX window. “Besides, lowering
MPR now will not translate
into improved lending, as the risk
within the real sector remains evident.
That said, the fiscal managers
should consolidate on the current
FX market gains by channelling
more effort to the successful implementation
of the approved government
policies targeted at lifting the
economy out of recession.