Ecobank Nigeria, a subsidiary of Ecobank Transnational Incorporated (ETI) Plc, has floated the first non-sovereign bond in Africa in the year with the launch of its $300 million bond.
The fixed-rate, dollar-denominated bond, with a tenor of five years, carries a coupon rate of 7.125 per cent and will be listed on the London Stock Exchange (LSE). The settlement date for the bond is tomorrow. The bond will mature in February 2026.
Ecobank was rated by an Issuer Rating of B- from Fitch Rating Agency and S & P. The coupon represents the lowest-ever coupon achieved by a Nigerian financial institution for a benchmark bond transaction.
At the peak of marketing transaction, the issue was over three times oversubscribed, with significant interest from international investors.
The transaction opened with initial price thoughts (IPT’s) of 7.75 per cent and finally tightened to close at 7.125 per cent on the back of robust demand.
In a regulatory filing, Ecobank stated that the strength and depth of the book demonstrated global investors’ strong appetite for the Ecobank franchise in Nigeria, a testament to the strength of the Ecobank Group.
“This transaction is the first non-sovereign bond from Africa in 2021 and is milestone capital raise for the banking sector in Nigeria, giving Ecobank access to global debt capital markets, and more favorable credit terms, commensurate with its strong financial position and robust capital structure.
For international investors, it represented an attractive option to gain exposure to Nigeria,” Ecobank stated.
This transaction followed a series of virtual global investor calls, with some blue-chip local, regional and international financial institutions, led by Citi, Mashreq, Renaissance Capital and Standard Chartered Bank as Joint Lead Managers and Bookrunners.
Managing Director, Ecobank Nigeria, Mr. Patrick Akinwuntan, said the bank was being proactive in optimising its capital structure as it continues to drive its medium term growth strategy of establishing itself as a leading facilitator of pan-Africa and international trade and payments.
“Despite the challenging global environment owing to the COVID-19 pandemic, and on the back of a successful N50billion Tier 2 issuance in December 2020, Ecobank Nigeria was able to successfully issue and price Nigeria’s first 2021 senior unsecured five-year bond transaction,” Akinwuntan said.
He praised the regulator, the Central Bank of Nigeria, for their timely support and continuous guidance, in granting necessary regulatory approvals.
“We believe that our capital raising activities are key steps forward towards strengthening Ecobank Nigeria beyond the regulatory ratios in addition to diversifying Ecobank Nigeria’s medium-term financing sources.
Ecobank Nigeria is poised for continued growth in the Nigerian financial services industry,” Akinwuntan said.