Bond issues are cropping up across Africa, and investor interest could be keen for selected issues, as seen by the US$1.5 billion orderbook for the African Development Bank global bond. Website www.africancapitalmarketsnews.com reports that new bond issues are springing including Kenya’s Kengen issue for more power generation which closed on 29 September, and bank issues in Nigeria and Uganda.
The Preferential Trade Area Bank, according to its website www.ptabank.org, has issued a Uganda Shs 40 billion bond (US$21 million) to be listed on the Uganda Securities Exchange www.use.or.ug), after approval from the exchange and the Capital Markets Authority. The offer was to close on 2 October. The Bank will use the proceeds to finance project activities in Uganda requiring local currency.
Stanbic Bank is arranger and lead placing agent and African Alliance Uganda Limited is sponsoring broker and co-placing agent. The duration is medium term and the bond offers both a fixed and floating rate.
The PTA Bank has a long-term BB- and a short term rating of B from Fitch, while Global Credit Rating gave it A1 local currency short-term, AA local currency long-term and a BB long term rating.
The Bank has also issued bonds worth $25 mln in Kenya, listed on the Nairobi Stock Exchange. in 1999 The PTA Bank issued a 5-year UgShs15 bln local currency bond which was fully redeemed on its maturity in 2004. Bank President, Dr. Michael Gondwe, says: "We believe in deepening the stock markets of the countries that we operate in through issuance of such instruments".
The Bank has financed $116 mln in trade and project activities in Uganda. In particular it has supported Uganda's coffee and cotton exports, first through its Structured Pre-shipment Financing Facility and later by directly financing exporters. Its authorized capital is $2 bln and subscribed capital is $1.18 bln, according to the bank's website. Net interest income rose to $15.2 bln last year, up 20% on the previous year. Profits were $12.5 mln at the end of 2008, up 87% on the previous year's $6.6 mln.
Nigeria's United Bank for Africa Plc www.ubaghana.com) aims to issue a N500 billion ($3.4 bln) in a combination of bonds with a 7-year duration, issued in tranches, and ordinary shares, according to its website. The bank was scheduled to hold an Extraordinary General Meeting of shareholders in Abuja on 2 October for their endorsement and had previously notified the Nigerian Stock Exchange.
Group Chief Finance Officer, Mr. Victor Osadolor, says proceeds will go into opportunistic acquisitions, funding infrastructure and the consolidation of the bank’s channel and IT infrastructure. The bank says it has over 7 mln customers across 750 branches in 19 African countries, as well as presence in New York, London and Paris.