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The explosion in demand for telecoms services in sub-Saharan Africa is having a knock-on effect on the region's capital markets. Uganda Telecom, for example, recently set up a USh54 billion ($27.35 million) secured medium-term note programme. It is one of the first local-currency MTN programmes to be listed on the Ugandan Stock Exchange, and the first secured bond issued by a Ugandan company.
Uganda Telecom kicked off its MTN programme with a USh24 billion first tranche, paying 1.65% over the benchmark, which is a 182-day Ugandan treasury bill, for a five year maturity. The Ugandan market does not have a government yield curve, and the longest-dated government paper is the 364-day treasury bill.
"Now we've come up with a five-year instrument that will help offer alternatives to link long-dated investors to the capital markets," says Peter Enti of the Africa fixed income desk of arranger Standard Chartered Bank. "And it will also help in the pricing of debt."
National Social Security Fund (NSSF) is underwriting the bonds, while KPMG Uganda is acting as auditor.
The first tranche consists of five-year floating rate notes due in 2008.