ETI’s additional $50m Eurobond records success with over subscription

Ecobank Transnational Incorporated (ETI), the Lomé-based parent company of the Ecobank Group, approached the international debt market to raise $50 million Eurobonds.

As a result of the confidence investors have in the African lender, the exercise received huge subscriptions as it was oversubscribed by over 4.6 times.

The dollar denominated senior unsecured bond offering was with the issue price of 104.915 per cent of the principal amount reflecting a yield of 8.25 per cent, a solid improvement from the yield of 9.75 per cent for the initial issue.

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According to Ecobank, the bonds will be consolidated and form a single series with the $450 million 9.5 per cent issued in April 2019.

Proceeds from the exercise will be used for the bank’s general corporate purposes and will further strengthen the liquidity of Ecobank.

A statement from the lender said the transaction is in line with its strategic objectives and forms part of the proactive management of its balance sheet to diversify funding sources and extend the average debt maturity profile.

The bonds have been placed with a broad range of institutional debt investors across Europe and Africa.

Both Standard and Poor’s and Fitch have confirmed credit ratings of B and B-Stable respectively to this tap issue, in line with Ecobank’s corporate rating.

Commenting, Mr Ade Ayeyemi, Group Chief Executive Officer of Ecobank, stated that, “As investor appetite deepens for emerging market offerings, we are positioned to offer the value that global investors seek.

“Our ability to open Africa to the world makes us a compelling choice. We appreciate the trust vested in us in continuing to build a strong independent African institution; a force for economic development in all of our operating markets.”

On his part, acting Group Chief Financial Officer, Mr Ayo Adepoju, also commented on the issuance saying, “The success of this tap which was more than four times oversubscribed, confirms Ecobank as an attractive investment for fixed income investors.

“We are pleased with the  performance  of  the  initial  issue  on  the  secondary  markets  and  the  increasingly competitive terms we have been able to achieve with this tap, as evidenced by a 150-basis point reduction in yield.”

In leiu of the development, the London Stock Exchange (LSE)  last Thursday hosted ETI to a market opening ceremony to celebrate the successful listing of the lender’s $500 million Eurobond on its main market.

The bond was oversubscribed with strong demand from international investors in the United Kingdom, United States, Europe, Middle East, Asia and Africa. It follows on from Ecobank’s 2017 convertible bond issuance on the International Securities Market.

The five-year senior unsecured notes, which mature in April 2024, were launched with a coupon interest rate of 9.50 percent per annum payable semi-annually in arrears.