United Capital on verge of double series bond issuance
By Saviour Adugba
Publicly listed investment banking group, United Capital plc, is on the verge of launching a double-edged debut series 1 and 2 bond. The issuance is a N20 billion 5-year and 7-year fixed rate senior unsecured bond which to the company said are a new series that would be floated under its N30 billion debt issuance programme.
Already, two rating agencies, Agusto & Co.and Datapro have provided rating guidance on the company to help investors looking to take positions when the issuance goes live.
Agusto and Co, the indigenous credit rating agency and an industry research leader, has given United Capital a Bbb- long term rating, while Datapro, a credit rating and compliance consulting firm, rated the company A-long term.
An explantory note on the Bbb-long term rating by Agusto shows that the credit rating agency believes that United Capital has the capacity to meet its financial commitment, but that the rating also means that harsh economic realities might weaken United Capital’s capacity to meet its financial commitment.
On the other hand, the A- long-term rating by Datapro suggests that they believe that United Capital has a low credit risk and that the company has the capacity to fulfill its financial obligations.
Analysts say with both ratings the deduction is that investors who will key into the bond issuance programme will face relatively low risk and that its customers can be assured that the company will fulfill its financial obligations.
United Capital said that it plans to use proceeds from the bond issuance in making anchor investments as well as in underwriting investment grade fixed income instruments issued by organisations that the issuer advises.
United Capital is a leading financial services group that provides tailored value-added services to individuals, commercial and corporate entities.
The company currently has total assets of N197 billion as at March 31, 2020, and over N120 billion in clients’ funds managed by its asset management subsidiary.
It is also known to have consistently shown a strong financial and operating track record posting a return on equity of 25% and a net profit margin of 57.8% as at financial year’2019.
Their offerings include; asset management, investment banking, trustee services, securities trading, and research in Nigeria through the group company and its independently managed subsidiaries.
Their subsidiaries are United Capital Asset Management, United Capital Trustee, and United Capital securities.