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There is currently one Corporate Bond and four Government Treasury Bonds listed on the Uganda Securities Exchange (USE), the Ushs.54 billion Uganda Telecom Limited Bond (UTL), the 2-year Uganda Government Treasury Bond (FXD 1/2004/2), the 3-year Uganda Government Treasury Bond (FXD 2/2004/3), the 5-year Uganda Government Treasury Bond (FXD 3/2004/5) and 10-year Uganda Government Treasury Bond (FXD 4/2004/10). The first bond to be issued was the Ushs.10 billion East African Development Bank (EADB) Bond in December 1997 and listed on the USE in January 1998 when the USE became officially operational. Thereafter, the Ushs.10.36 billion PTA Bank Bond was issued and listed in March 1999. Thereafter, the Ushs.54 billion Uganda Telecom Limited Bond was listed in September 2003 and more recently, the 2, 3, 5-year and 10-year Uganda Government Treasury Bonds which were listed in January, February, March and April 2004. MTN Uganda Limited also plans to list the company's Ushs.12.50 Billion Note Issuance Programme on the USE. 3 tranches of the MTN Note were issued by private placement in August, November and December 2001.
Corporate Bonds
1. Uganda Telecom Limited (UTL)
Uganda Telecom Limited launched a Ushs.54 Billion Medium Term Note Programme (approximately US$27 million equivalent) on 10th July 2003. The proceeds from the Programme will enable UTL to improve and increase capacity on its cellular network coverage in rural areas, to expand and rehabilitate its landline network and subscriber base by installing additional lines necessary to connect subscribers, to build a countrywide data network, finance related civil infrastructure transport and IT facilities for other corporate business purposes, and to refinance existing indebtedness. The principal of the Notes is secured by a Standard Chartered Bank (U) Limited Debenture.
UTL issued the first (1st) Tranche of Floating Rate Notes under the Programme, worth Ushs.30 billion, on 10th July 2003. The 5-year Notes were issued at a floating rate margin of 1.65% above the 182-day Treasury Bill which is the reference rate. The Reference Rate is to be re-priced semi-annually and interest will be paid semi-annually. The Principal of the Notes is to be amortized semi-annually over the 5-year life of the Notes.
The UTL Bond was listed on the USE on September 16, 2003.
In 1997, the Government of Uganda decided to liberalize the telecommunications sector, by enacting the Communications Act. This resulted into the split of the Uganda Posts and Telecommunications Corporation (UPTC), the then state owned enterprise, into Uganda Posts Limited (UPL) and Uganda Telecom Ltd (UTL). In June 2000, UTL was privatized and 51% of its shares were sold to a consortium, Ucom Limited, comprising of the German firm Detecon (20%), Telecel (59.2%) and Orascom (20.8%). The Government of Uganda holds 49%.
Uganda Telecom was voted East Africa’s seventeenth (17th) Most Respected Company in 2003, in a PricewaterhouseCoopers survey.
Legal Advisors (Uganda)
Advisors to Uganda Telecom Limited on the Programme included: Investment Advisor / Arranger - Standard Chartered Bank Uganda Limited; Dealer & Sponsoring Broker - MBEA Brokerage Services (Uganda) Limited; Underwriter – National Social Security Fund; Auditor & Reporting Accountant – KPMG Uganda Limited; Legal Advisors (Uganda) – Sebalu & Lule Advocates; Legal Advisors (International) – Denton Wilde Sapte; Trustee – Livingstone Registrars (Uganda) Ltd; Issue & Paying Agent & Registrar – Standard Chartered Bank Uganda Limited.
2 . MTN Uganda Limited
MTN Uganda launched a Ushs.12.50 Billion Note Issuance Programme (approximately Swedish Krona 80 million or US$8 million equivalent) on 27th August 2001. The Programme permits MTN Uganda to issue Notes on varying terms and conditions over an 8-year period, with a minimum duration of 3 months and a maximum of 8 years. The outstanding amount of Notes at any one time over the 8-year duration of the Programme cannot exceed Ushs.12.5 billion. The principal of the Notes was guaranteed by the Swedish Government in Swedish Krona, through the Swedish International Development Cooperation Agency (Sida).
MTN Uganda issued the first (1st) Tranche of Notes under the Programme, worth Ushs.5.0 billion, on 27th August 2001. The 4-year Notes were issued at a floating rate margin of 1.0% above the 182-day Treasury Bill. The Principal of the Notes is amortized semi-annually over the life of the Notes. The second (2nd) Tranche of Notes worth Ushs.2.5 billion were issued on 26th November 2001, while the third (3rd) Tranche of Notes worth Ushs.2.0 billion were issued on 7th December 2001. Both the second (2nd) and third (3rd) Tranches were issued under the same terms and conditions as the first (1st) Tranche.
MTN Uganda plans to list the Notes under the Programme on the USE following the issue of the fourth (4th) Tranche of Notes worth Ushs.3.0 Billion.
MTN Uganda, which launched full commercial operations in October 1998, is the Country’s second national telecommunications operator (SNO). The Company represents an alliance of proven African Telecommunications experience and local knowledge and has the following shareholders: MTN Group, South Africa through Mobile Telephone Networks International Ltd. (Mauritius) (50.02%); Telia Overseas AB (Sweden) (32.44%); Invesco Uganda Ltd. (Uganda) (2.66%); and Tristar Investments SARL (Rwanda) (14.88%). Elsewhere in Africa the Company's shareholder groups have interests in networks in Namibia, South Africa, Swaziland, Rwanda and Cameroon.
MTN Uganda was voted East Africa’s third (3rd) Most Respected Company in 2003, in a PricewaterhouseCoopers survey. The Company was number 9 the previous year.
Agent Bank
Advisors to MTN Uganda on the Programme included: Advisor / Arranger - Standard Bank London; Co-Advisor / Sponsoring Broker - MBEA Brokerage Services (Uganda) Limited; Agent Bank - Stanbic Bank Uganda Limited; Legal Advisors - Shonubi Musoke & Co., Advocates; Reporting Accountants' - PricewaterhouseCoopers.
3 . PTA Bank
In March 1999, The Eastern and Southern African Trade and Development Bank (PTA Bank) issued a 5-year Ushs.8.36 billion floating rate bond due in 2004, which was listed on the USE on 11th March 1999. The 5-year PTA Bank Bond matured in March 2004. The bonds bore interest at the Reference 182 Treasury Bill yield plus a margin of 1.75%, payable semi-annually. Additional post-issue subscriptions increased the size of the PTA Bank Bond to Ushs.10.36 billion.
The PTA Bank is a regional trade and development bank whose shareholders are: Burundi, China, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Somalia, Sudan, Tanzania, Zambia, Zimbabwe and the African Development Bank. The Bank’s headquarters are in Bujumbura, Burundi, however it is currently operating out of Nairobi, Kenya. The Bank’s main mission is to act as a financial vehicle for contributing towards the socio-economic development of its member states, and promoting intra-COMESA (Common Market for Eastern and Southern Africa) trade and the economic integration of the COMESA region.
Advisors to PTA Bank on the issue included: Arranger - Loita Capital Partners International Limited; Sponsoring Broker - Equity Stock Brokers (Uganda) Limited; Agent Bank and Registrar - Nile Bank Limited; Legal Advisors (UK) - White & Case; Legal Advisors (Uganda) - Byamugisha & Rwaheru, Advocates; Reporting Accountant - Coopers & Lybrand.
4. East African Development Bank
In December 1997, East African Development Bank (EADB) issued a 4-year Ushs.10 billion floating rate bond due in 2001, which was listed on the USE on 5th January 1998. The EADB Bond matured in December 2001. Interest on the bonds was pegged to the Reference 182 Treasury Bill yield plus a margin of 2%, payable semi-annually.
The EADB is a multilateral development bank, the shareholders of which are Kenya, Uganda and nine non-state members which include The African Development Bank, FMO-Netherlands, DEG-Germany, A consortium of Yugoslav Institutions, SBIC-Africa Holdings, Commercial Bank of Africa-Nairobi, Nordbanken AB-Stockholm, Standard Chartered-London, & Barclays Bank International-London. The EADB is headquartered in Kampala, Uganda. The main purpose of the bank is to further the economic development and social progress of its member states, individually and collectively.
Advisors to EADB on the issue included: Arrangers - Cedef Assets Limited, UK / Nile Bank Limited; Sponsoring Broker - MBEA Brokerage Services (Uganda) Limited; Legal Advisors - Byamugisha & Rwaheru, Advocates; Reporting Accountant - Ernst & Young.
Government Treasury Bonds
1. 2- Year Government Treasury Bond (FXD 1/2004/2)
The Ushs.20 billion 2- Year Government Treasury Bond was the first long-dated Government Bond to be issued in Uganda. The Bond was issued and listed in January 2004, at a Yield-To-Maturity (YTM) of 20.808% and a Weighted Average Price (WAP) of 83.018. The coupon interest rate is fixed at 10% with interest payments to be made semi-annually. The Central Bank re-opened this issue in June 2004 with the sole objective of improving its liquidity to make it easier to trade. An additional Ushs.30 Billion was issued at the coupon rate of 10%, and a Yield-To-Maturity of 13.558%.
2. 3- Year Government Treasury Bond (FXD 2/2004/3)
The Ushs.20 billion 3- Year Government Treasury Bond was the second long-dated Government Bond to be issued in Uganda. The Bond was issued and listed in February 2004, at a Yield-To-Maturity (YTM) of 15.479% and a Weighted Average Price (WAP) of 87.819. The coupon interest rate is fixed at 10.25% with interest payments to be made semi-annually.The central Bank re-opened this issue in June 2004 with the sole objective of improving it's liquidity to make it easier to trade. An additional Ushs. 30 billion was issued at the coupon rate of 10.25% and a yield to maturity of 15.127%
3. 5-Year Government Treasury Bond (FXD 3/2004/5)
The Ushs.20 billion 5- Year Government Treasury Bond was the third long-dated Government Bond to be issued in Uganda. The Bond was issued and listed in March 2004, at a Yield-To-Maturity (YTM) of 12.802% and a Weighted Average Price (WAP) of 92.590. The coupon interest rate is fixed at 10.75% with interest payments to be made semi-annually.
4.10-Year Government Treasury Bond (FXD 4/2004/10)
The Ushs.15 billion 10- Year Government Treasury Bond was the fourth long-dated Government Bond to be issued in Uganda. The Bond was issued and listed in April 2004, at a Yield-To-Maturity (YTM) of 13.477% and a Weighted Average Price (WAP) of 86.608. The coupon interest rate is fixed at 11.00% with interest payments to be made semi-annually.
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