The management of UAC Nigeria Property Development Company (UPDC) Plc has decided to redeem the 5-year bonds worth N4.36 billion it issued in 2018.
The notes were due to mature in 2023, but ostensibly due to the low yield environment in the nation’s fixed income market, the real estate firm feels it would be too expensive to continue to service the debt.
Business Post reports that UPDC sold the papers to investors in 2018 at an annual interest rate of 16 per cent and at the moment, companies are raising capital from the market for as low as 6 per cent.
This situation may have prompted the decision of the management to recall the bonds so as to reduce the amount it uses to service the debt.
In a statement, the firm disclosed that it would redeem the bond on April 26, 2021, noting that bank accounts of the buyers of the notes would be credited by the registrar, Africa Prudential Plc.
UPDC explained that it took this action in line with a clause the bondholders agreed to abide with when they bought the papers from the company.
“Notice is hereby given to the Series 1 bondholders that, pursuant to Condition 3.2 of the terms and conditions of the bonds, the issuer will redeem the N4,355,000,000 Series 1 bonds on April 26, 2021, together with accrued coupon up to, but excluding the redemption date.
“Coupon on the bonds will cease to accrue on and after the redemption date. Following the redemption, the listing of the bonds on the FMDQ Securities Exchange Limited will be cancelled.
“On the redemption date, Africa Prudential Plc as the registrar of the bonds, shall pay to each bondholder, the amount payable to him/her in respect of the redemption equal to 100 per cent of the principal amount together with all accrued and unpaid coupon and such payment shall be made to the bank account designated by each bondholder for that purpose,” the company said.
– Business Post