Ecobank goes into $300m debt to attract foreign investors

Ecobank’s $300 million bond which will be listed on the London Stock Exchange (LSE) has been oversubscribed by foreign investors during the marketing of the transaction.
The loan which has a five-year tenure, maturing in February 2026, is the first non-sovereign bond out of Africa in 2021.

According to a statement from Ecobank obtained from the Nigerian Stock Exchange (NSE), the bond carries a coupon rate of 7.125% having opened the Initial Price Thoughts (IPTs) of 7.75%, before it was priced down.

Ripples Nigeria gathered that the coupon represents the lowest yield achieved by a Nigerian financial institution for a benchmark bond transaction.

The bank said the bond listing will expose the lender to international investors, while the investors get access to Nigerian market – bonds used by companies to secure loan from investors.

“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 reads.

READ ALSO: Ecobank seeks foreign investors amid falling revenue

Commenting on the issuance, Managing Director of Ecobank Nigeria, Patrick Akinwuntan, said, “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.

“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.”

By Fakoyejo Olalekan….

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