The United bank for Africa has informed in a statement that  the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission have given “No Objection” approvals to its strategic decision to  sell a USD500 million senior unsecured debt notes.

The transaction intended for the Irish stock exchange.  According to Thomson Reuters Eikon, senior unsecured debt notes are debts that take priority over other unsecured or otherwise more “junior” debt owed by the issuer. “Senior debt has greater seniority in the issuer’s capital structure than subordinated debt”.

UBA will list the instrument on the Irish Stock Exchange while the bank intends to utilize net proceeds of the notes for its general banking purposes.

The banking conglomerate intends to issue 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 maturity of the Notes.

The Bank intends to utilize the net proceeds of the  senior unsecured Notes for its general banking purposes. UBA 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 UBA’s requirement from time to time claims a source pageone ng

A certificate of capital importation (“CCI”) will not be obtained in respect of the proceeds of the Notes that are not converted into Naira because a CCI is only issued in respect of capital imported into Nigeria and converted into Naira.

UBA will to make principal repayment 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, UBA will obtain the approval of the CBN to access the official foreign exchange market if for any reason the bank does not have sufficient foreign currency reserves to meet the principal and interest payments due on the Notes.

With additional culled from:  Pageone.ng.