Ecobank Nigeria, a wholly-owned subsidiary of pan-African banking giant, Ecobank Transnational Incorporated (ETI), the parent company of the Ecobank Group, on Friday said it has successfully priced its US$300m bond issuance with the settlement now to take place February 16, 2021, ahead of its 2026 maturing date.
The fixed-rate, US dollar-denominated bond, with a tenor of five years, an Issuer Rating of B- from Fitch Rating Agency and S & P, carries a coupon rate of 7.125% and will be listed on the London Stock Exchange.
The coupon/yield, according to a statement by the group, represents the lowest ever coupon achieved by a Nigerian financial institution for a benchmark bond transaction.
At the peak of marketing the transaction, the issue was more than three times oversubscribed, with significant interests from international investors, besides opening with Initial Price Thoughts (IPTs) of 7.75%, before finally tightening 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. This transaction is the first non-sovereign bond from Africa in 2021 and is milestone capital raise for the banking sector in Nigeria, the statement added.
The transaction also gives 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, the statement added.
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.
Commenting on the issuance, Patrick Akinwuntan, Managing Director of Ecobank Nigeria, said “despite the challenging global environment owing to the COVID-19 pandemic, and on the back of a successful N50bn 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.
”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.
“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,” he added
He expressed the belief that the “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.”
