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+--- Thread: United Capital raises N10b in first bond issue (/showthread.php?tid=33872)
United Capital raises N10b in first bond issue - Edoman - 05-26-2020
United Capital raises N10b in first bond issue
May 26, 2020
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![[Image: GCEO-United-Capital-Peter-Ashade-1.jpg]](https://thenationonlineng.net/wp-content/uploads/2020/05/GCEO-United-Capital-Peter-Ashade-1.jpg)
GCEO, United Capital, Peter Ashade
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United Capital Plc has raised N10 billion in new debt capital, breaking a new ground with its first bond issuance as the first issuing house to issue a corporate bond in the history of the Nigerian capital market.
The Series 1 Bond was issued under the company’s N50 billion medium-term debt programme, which was registered with the Securities and Exchange Commission (SEC). The bond was oversubscribed by 24 per cent.
Group Chief Executive Officer, United Capital Plc, Peter Ashade said the bond issuance solidifies the company’s performance record as a formidable ally in the investment banking industry.
“With an oversubscription by 24 per cent investor orders, we believe this milestone accentuates the confidence in our Institution, and its ability to diversify our corporate funding sources, provide innovative financial solutions and our unwavering commitment to our esteemed clients,” Ashade said.
Managing Director, Investment Banking, United Capital Plc, Babatunde Obaniyi, said the bond issuance added to the impressive portfolio of innovative and landmark transactions that the company had structured.
According to him, the bond issuance again highlighted the company’s capabilities in the successful execution of novel debt capital market transactions.
He noted that as a joint issuing house and book runner on the deal, the company advised on the transaction structure, securing regulatory approvals and marketing strategy for the bonds including market timing, investor road show and crafting an appropriate and compelling business case for the issuance.
“The transaction, which has a tenor of five years, recorded a 124 per cent subscription, with huge commitments from a diversified institutional investors base including Pension Fund Administrators and other players in the financial service space. This very strong outcome further affirms buy-side investors’ confidence in United Capital Plc, and a testament to the leading role United Capital continues to play in the financial services space” Obaniyi said.
United Capital had started the 2020 business year with a well-rounded performance in the first quarter as the investment banking group recorded double-digit growths in all key performance indices.
Key extracts of the interim report and accounts of United Capital for the three-month period ended March 31, 2020 showed that gross earnings rose by 32 per cent while pre and post tax profits grew by 53 per cent and 54 per cent respectively.
Gross earnings rose to N1.92 billion in first quarter 2020 compared with N1.45 billion in first quarter 2019. Operating income rose by 40 per cent from N1.35 billion in 2019 to N1.89 billion in 2020. Profit before tax increased from N766.87 million in first quarter 2019 to N1.18 billion in first quarter 2020. After taxes, net profit rose from N644.17 million in first quarter 2019 to N991.29 million in first quarter 2020. Earnings per share for the three-month period thus increased from 11 kobo in 2019 to 17 kobo in 2020.
The balance sheet also showed improved performance as total assets rose from N150.46 billion recorded by the year ended December 31, 2019 to N197.41 billion by March 2020. Total liabilities also rose from N130.88 billion in December 2019 to N176.69 billion by March 2020. Shareholders’ funds thus increased by six per cent from N19.59 billion in December 2019 to N20.72 billion in March 2020.
The company attributed its top-line growth to significant increases in fee and commission incomes and net interest margin. The company’s fee and commission income rose by 55 per cent while net interest margin improved by 223 per cent.
Cost to income ratio had improved significantly at 39 per cent in first quarter 2020 compared with 47 per cent in comparable period of 2019. With this, pre-tax profit margin improved to 61 per cent as the company continued to implement cost containment measures.
United Capital had distributed N3 billion to shareholders as cash dividends for the 2019 business year. Shareholders received a dividend per share of 50 kobo.