Ecobank Transnational Incorporated (ETI), the Lomé-based parent company of the Ecobank Group, has successfully raised $450 million in its debut Eurobond, which was oversubscribed.
A Eurobond is an international instrument that represents a loan, issued in a currency that is different from that of the country or market in which the bond is issued.
ETI’s Global Offering, for instance, is a 5-year unsecured note listed on the main market of the London Stock Exchange. The bond matures in April 2024 and was issued with a coupon pricing of 9.5% with interest payable semi-annually in arrears.
The proceeds will be used for ETI’s general corporate purposes and to refinance existing Holdco obligations.
Private organizations, international syndicates, and even governments who are in need of foreign denominated borrowings for a specified duration find Eurobonds suitable for their needs. Eurobonds are usually offered at fixed interest rates, offering a clear fixed-payment debt structure for the issuer even in the long term.
Investor interest for Ecobank’s Eurobond was global with bids from the United Kingdom, the United States, Europe, the Middle East, Asia, and Africa.
“This is another first for Ecobank and I’m very excited at the prospects for the Group as we continue the second phase of our 5-year ‘Roadmap to leadership’ strategy,” commented Mr. Ade Ayeyemi, Group Chief Executive Officer of ETI.
The Roadmap to leadership’ strategy is an initiative that aims to build a stronger and profitable financial institution. Ayeyemi, said in an earlier statement that the Pan-African lender has put in place a robust strategy to realize its objective.
“Our…strategy will see us clarify portfolios across countries and businesses, maximize value of portfolios, defend leadership positions in West Africa. Specifically, we will also increase market share and improve profitability and return metrics in Nigeria,” he explained in the previous address.
“Our efforts toward greater operational and capital efficiency are paying off, and this offer is another example of the measures we are taking to strengthen our institution and deliver value for all of our stakeholders,” Ayeyemi said in a more recent statement issued this week.
Group Chief Financial Officer, Mr. Greg Davis said that the success of the Eurobond reflects an “appetite from high quality and real money institutional investors globally.”