Uganda's largest bank to issue corporate bond

Stanbic Bank Uganda (SBU) plans to issue a corporate bond by year end to support long-term lending.

A unit of South Africa’s Standard Bank and listed on the Uganda Stock Exchange, SBU has only previously issued seven-year notes worth Ush30 billion ($10 million) in 2009.

“We’re doing it just for capital, so that we have tier two capital... long-term capital. For banks, that’s an important thing because it allows us to lend more out,” Chief Executive Patrick Mweheire said. He said the tenure for the planned bond would be between seven and 10 years and that the debt size “will probably be large”.

He said a decision on whether the bond’s rate would be fixed or floating was yet to be made.

Although the bank’s 2009 bond was sold to few selected investors, participation in the new bond would be open.

SBU signed a syndicated 18-month loan of $85 million earlier this year to back lending for trade-related finance mainly in the energy, manufacturing and infrastructure sectors.

The bank lifted its 2014 pre-tax profits by 34 per cent to Ush181.3 billion compared to the previous year.