Cash tender offer for outstanding UBA’s $500mn notes, expires November 16

There are indications that the expiration date for a cash tender offer on the outstanding $500 million United Bank for Africa Plc’s (UBA) notes, launched alongside $300 million new issue, is November 16.

Citibank, Mashreqbank, Renaissance Capital and Standard Chartered Bank are acting as dealer managers on the tender offer.

Meanwhile, UBA successfully raised $300 million through its recently announced $1.5 billion global medium-term note programme, net proceeds from which will be used to repay the outstanding debt.

According to information from the bank, the five-year senior unsecured notes (144A/RegS) were issued at a coupon of 6.750 per cent.

The unsecured notes were listed on the London Stock Exchange and have received a ‘B’ rating from Fitch and a ‘B-‘ rating from S&P.

The offering was announced on November 8 and received global investor interest (order books were 1.7x oversubscribed).

Available records show that the transaction attracted an order book of US$ 520 million representing 1.7 times oversubscription, relative to the target size of US$ 300 million.

“The issue attracted interest from global investors across Europe, U.S., Middle East, Asia and Africa, with orders from quality real money accounts.

“UBA’s ability to achieve this transaction despite the challenging market backdrop reflects continuing global investor appetite for UBA’s credit and support for the group’s pan African banking strategy.

“In conjunction with the new issue, UBA announced a tender offer on the existing US$ 500 million Senior Unsecured Notes due 2022. The issue size of US$ 300 million represents the amount required to fund the tender offer based on the maximum expected hit rate, in line with market precedents,” a note from the lender explains.

The new issue along with the liability management exercise complements UBA’s stable funding base and supports the growth of the bank’s balance sheet and the overall business.

This issuance, it stated, represents UBA’s second Eurobond transaction and the bank’s first issuance under the recently established  US$1.5 billion Global Medium Term Programme, which was set up to enable the bank access funding from the international debt capital markets, as and when required, in line with its growth plans and funding strategy.

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