Plan by Pan-African bank, Ecobank Transnational Incorporated to raise $300 million from the international debt capital markets through the issuance of Tier 2 qualifying sustainability notes, will be largely successful, financial sector analysts have said.
In 2019, the leading Continental commercial bank raised a $500 bond which was oversubscribed. The reputation of the bank seems to have also become even stronger lately, with recent disclosure by CardinalStone, a reputable sector analyst that the bank is one of the two Deposit Money Banks, DMBs in the country that is not facing liquidity problems.
CardinalStone Partners, in the report said most tier 1 and tier 2 banks in the country are currently cash strapped, and in order to meet the cash demands of their customers, the DMBs have resolved to borrowing from the Standing Lending Facility, SLF, a specialize credit window of the Central Bank of Nigeria, CBN.
According to a disclosure, the leading Pan-African banking group with banking operations in 33 countries said it “hereby notifies the Nigerian Exchange Limited, the Ghana Stock Exchange and the Bourse Régionale des Valeurs Mobilières (the “Stock Exchanges”) that it is seeking to raise US$300 Million from the international debt capital markets through the issuance of Tier 2 qualifying Sustainability Notes pursuant to the United States Securities and Exchange Commission Rule 144A and Regulation S (the“Notes”).
The disclosure signed by Adenike Laoye said “an equivalent amount of the net proceeds of the Notes will be used to finance or re-finance, in part or in full, new or existing eligible assets in accordance with ETI’s Sustainable Finance Framework.
“In view of the foregoing, ETI is pleased to notify the Stock Exchanges of the proposed launch of the Notes. ETI intends to list the Notes on the London Stock Exchange, with the expectation that the Notes will be traded on its regulated market. It should be noted that the issuance of the Notes (the “Transaction”) is subject to prevailing market conditions and the conclusion of the necessary Transaction documentation,” the notice said.
Two years ago, the Continental financial institution issued a $500 million Eurobond which was oversubscribed with strong demand from international investors in the United Kingdom, United States, Europe, Middle East, Asia and Africa, following the bank’s 2017 convertible bond issuance on the International Securities Market.
The five-year senior unsecured notes, which will mature in April 2024, were launched with a coupon interest rate of 9.50 per cent per annum payable semi-annually in arrears.
In March this year, the African financial behemoth successfully priced its $300 million bond issuance on the London Stock Exchange, LSE.
The bond which is expected to mature in February 2026 has a settlement period of 16 February 2021.
The fixed-rate, US dollar-denominated bond, with a tenor of five years, the financial giant said early in the year, carries a coupon rate of 7.125 per cent and will be listed on the London Stock Exchange.
The February bond issue was accompanied by an Issuer Rating of B- from Fitch Rating Agency and S & P, while the yield represents the lowest ever achieved by a Nigerian financial institution for a benchmark bond transaction.
The issue was over three times oversubscribed, with significant interest from international investors across major continents.
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