Nigerian Banks Make Eurobond Comeback as UBA Plans Debut Deal

LAGOS (Capital Markets in Africa) – United Bank for Africa Plc said it plans to sell a debut Eurobond, a day after local rival Zenith Bank Plc tapped the market for the first time since 2014.

UBA, Nigeria’s third-biggest lender by assets, wants to sell as much as $500 million of senior unsecured debt, it said in a statement to the Nigerian Stock Exchange. It will announce plans later on Tuesday for investor meetings in Europe and the U.S.

The lender’s chairman, Tony Elumelu, said last week in an interview that conditions for Nigerian borrowers were improving as the economy comes back from its worst slump in a quarter century and foreign-exchange shortages ease. While the statistics office said Tuesday that gross domestic product contracted by 0.5 percent in the first three months of the year, that was the best performance in four quarters.

UBA’s shares fell 3.1 percent to 7 naira as of 11:22 a.m. in Lagos, paring gains this year to 56 percent. Nigeria’s banking sector index rose 0.1 percent.

Zenith, the country’s second-biggest bank, issued a $500 million senior bond due May 2022 with a yield of 7.375 percent. That was less than an initial guidance in the high 7 percent-range after the deal was four times oversubscribed, according to a person familiar with the matter who asked not to be identified.