June 13, (THEWILL) – Finance and investment experts have commended the United Bank for Africa (UBA) Plc for the prompt redemption of its $500 million 5-year Eurobond notes.
They also expressed optimism that the action would boost investors’ confidence in Africa’s Global Bank.
These views were expressed by Mr George Akindero, an Investment Analyst and Mrs Bridget George, a Finance and Banking Consultant in separate interviews with THEWILL.
According to Akindero, the step taken by the bank shows that the management is focused and is serious about the image of the organization.
“Eurobond is an international exposure that no organization should joke about. By redeeming the instrument, the bank has shown example in good corporate leadership and it will endear investors to it as a bank that is focused”, Akindero said.
He added that the Eurobond transaction is a very sensitive one because it could ruin an organization if it is not properly managed, especially for a reputable financial organization with many offshore subsidiaries.
On her part, George praised the management of UBA for the efficient utilisation of the proceeds of the Eurobond. She also observed that Eurobond has implications for the country because it showcases Nigeria to the outside world.
“When you go into Eurobond, you are exposing your country to the outside world because it shows how reliable your business environment is. Though it is one of the most secured investment windows, if your country’s investment or business climate is unsuitable, no one buys into your Eurobond,” George told THEWILL by telephone.
The Finance and Banking expert said that the pan-African status of UBA helped in boosting its image and earning it the required level of confidence that attracts investors. “With many subsidiaries outside Nigeria, it is easy for investors to buy into your instrument.”
UBA recently redeemed its debut $500 million 5-year Eurobond notes with the maturity date of June 8, 2022. Issued in 2017, the five-year bond was offered at a coupon rate of 7.75%, and raised to support the Bank’s business in key sectors of the economy.
The Pan-African bank issued the five-year bond at a coupon rate of 7.75 percent and, in November 2021, repurchased $310.9 million of the notes through a cash tender offer.
As part of UBA’s liability management strategies, in November 2021, the bank repurchased $310.9 million of the notes through a cash tender offer. Upon maturity of the Eurobond, the outstanding portion of $189.1 million and the coupon of $7.3 million were redeemed by the bank
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