Ecobank Nigeria, a wholly owned subsidiary of leading pan-African banking giant, Ecobank Transnational Inc (ETI), has declared it has successfully priced its $300 million bond issuance that will mature in February 2026.
The fixed-rate, US 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. It is accompanied by an issuer rating of B- from Fitch Rating Agency and S&P. The coupon or yield represents the lowest ever coupon or yield achieved by a Nigerian financial institution for a benchmark bond transaction.
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 (IPTs) of 7.75 per cent and finally tightened to close at 7.125 per cent 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.
This transaction is the first non-sovereign bond from Africa in 2021 and is milestone capital rise for the banking sector in Nigeria that will 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. The transaction follows 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.
Ecobank Nigeria Managing Director Patrick Akinwuntan said of the issuance, “Despite the challenging global environment owing to the Covid-19 pandemic and on the back of a successful NGN 50bn Tier Two issuance in December 2020, ENG was able to successfully issue and price Nigeria’s first 2021 senior unsecured five-year 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.”
Mr Akinwuntan added, “I would like to extend my appreciation to our regulators, 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 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,” he said.
- A Tell report