4 BUSINESS DAY C002D5556 Wednesday <strong>24</strong> <strong>May</strong> <strong>2017</strong> 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, <strong>May</strong> 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 <strong>2017</strong>, 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.<strong>24</strong> percent in April as against 17.26 in March <strong>2017</strong>. 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.
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