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Fitch Ratings has assigned Ecobank Nigeria Limited‘s forthcoming U.S. dollar-denominated senior unsecured notes an expected ‘B-(EXP)’ rating with a Recovery Rating of ‘RR4’.
The notes are being issued by EBN Finance Company BV a special purpose vehicle of ENG incorporated in the Netherlands. ENG’s other ratings are unaffected by today’s rating action.
The proceeds of the senior participation notes will be used by ENG for general-banking purposes, including providing the bank with stable medium-term funding.
Ecobank Nigeria, On Thursday, announced that it has successfully priced the USD 300 million bond issuance maturing in February 2026, with the settlement of the bond to take place on 16 February 2021.
The fixed-rate, U.S. dollar-denominated bond, with a tenor of five years, carries a coupon rate of 7.125% 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/yield represents the lowest ever coupon/yield achieved by a Nigerian financial institution for a benchmark bond transaction.
B’ ratings by Fitch means the security has material default risk, but a limited margin of safety remains. It means financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
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 (‘IPT’s’) of 7.75% and finally tightened 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.
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