Ecobank Nigeria issues US$300m bond with a tenor of five years

NIGERIA – Ecobank Nigeria, a wholly owned subsidiary of Ecobank Transnational Incorporated, the parent company of the Ecobank Group, has successfully priced its US$300 million bond issuance maturing in February 2026, with settlement of the bond to take place on February 16, 2021.

The fixed-rate, US dollar-denominated bond, with a tenor of five years, carries a coupon rate of 7.125% and will be listed on the London Stock Exchange. It is accompanied by an Issuer Rating of B- from Fitch Rating Agency and S&P.

The coupon / yield represents the lowest ever coupon / yield achieved by a Nigerian financial institution for a benchmark bond transaction.

“Ecobank Nigeria, through this issuance, is being  proactive in optimizing 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.”

Patrick Akinwuntan – Managing Director, Ecobank Nigeria

At the peak of marketing the 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% and finally tightened to close at 7.125% on the back of robust demand.

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.

“Despite the challenging global environment owing to the COVID-19  pandemic, and on the back of a successful NGN 50bn Tier 2 issuance in December 2020, ENG was able to successfully issue and price Nigeria’s first 2021 senior unsecured 5-year bond transaction,” Patrick Akinwuntan, Managing Director of Ecobank Nigeria, said.

“Ecobank Nigeria, through this issuance, is being  proactive in optimizing 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.”

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 favourable 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.

“We believe that our capital raising activities are key steps forward towards strengthening ENG beyond the regulatory ratios in addition to diversifying ENG’s medium-term financing sources. ENG is poised for continued growth in the Nigerian financial services industry,” Patrick said.

This transaction followed a series of virtual global investor calls, with a number of blue-chip local, regional and international financial institutions, led by Citi, Mashreq, Renaissance Capital and Standard Chartered Bank as Joint Lead Managers and Bookrunners.

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