UBA Bond Lifts NSE’s Debt Market Capitalisation to N5.564tn

across Africa now is debt. Companies are inherently underleveraged in Nigeria so we are going to see more debt issuance before you see equity issuance. Companies have to come because the balance between the interest of the investors and the company moving forward. So we expect more of IPOs taking off from the second half of next year,” Adebayo said.

Some investors prefer investing in IPOs because of their capital gain potential. It is believed that shares offered through IPOs are under-priced and have the potential to rise after listing. Hence, investors always swoop on such shares. its mobile arm, Mtel-with everything functional was sold for $1.1 billion-I want you to compared carefully; In 2005, when NItel had undergone some level of dilapidation because since ILL could not pay, government was not making additional investment in NItel-it deteriorated and in 2005, in a competitive bidding process, Orascom that is an international telecom operator bought Nitel for $256 million.”

He said: “Government told Orascom to increase its bid, they refused and walked away and said if you don’t sell Nitel to us at $256 million which is the value we think Nitel is worth as at that time-and the mobile networks were working, the landlines were working and the international gsm were all working-$256 million in 2005. Then Transcorp took over and could not inject the necessary capital. And by the last five years, Nitel had completely shut down.”

He spoke against the backdrop of criticisms that the assets may have been grossly undervalued.

Goddy Egene

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

Computer Warehouse Group (CW) Plc, a pan African information communication technology(ICT) has recorded revenues of N15.3 billion for the year ended December 31, 2014, showing a decline of 26 per cent from N20.6 billion in 2013. Gross profit fell by 27 per cent from N3.9 billion to N3.0 billion, reflecting the harsh operating environment and the fall in oil prices, which slowed down economic activities during the year.

The company’s gross margin improved from 19 per cent by from to 20 per cent, while the financing costs and general operating costs declined by 43 per cent and 15 per cent from N348.7 million to N199 million and N3.2 billion to N3.2 billion respectively, indicating better efficiency of its operations. According to the company, the bottom line figures were affected primarily by two factors.

“First was the drop in the revenue figures with a less than corresponding drop in the operating costs. The second was the foreign exchange losses, of up to N380 million arising out from the gradual 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.