(Ecofin Agency) - • Ecobank Transnational issues $125M in senior bonds, totaling $525M outstanding
• Funds will refinance maturing debt and boost financial flexibility
• Strong investor demand offsets challenges at Nigerian subsidiary

Ecobank Transnational Incorporated (ETI), a pan-African banking group headquartered in Lomé, Togo, has announced the successful issuance of $125 million through a non-guaranteed senior bond. This new issue adds to the $400 million raised earlier in 2024, bringing the group’s total outstanding bonds to $525 million, with a maturity date of October 15, 2029.

The bonds were issued at a price of 102.634%, resulting in an effective yield of 9.375%. According to ETI, investor demand was robust, with the order book exceeding twice the amount offered. The subscribers included asset managers, banks, and development finance institutions from Africa, Europe, the United Kingdom, the United States, the Middle East, and Asia—signaling broad market confidence in the banking group, which operates in 35 sub-Saharan African countries.

The transaction was led by a consortium of financial institutions, including Absa, Africa Finance Corporation, African Export-Import Bank, and Mashreq. Standard Chartered Bank acted as co-lead manager and bookrunner, while Renaissance Capital Africa served as financial advisor.

Proceeds from the bond will be used primarily to refinance maturing obligations and to strengthen ETI’s financial flexibility, reinforcing its position in international capital markets. Despite this positive development, the group continues to face challenges, particularly related to its Nigerian subsidiary.

Ecobank Nigeria is currently under regulatory pressure for failing to meet the required capital adequacy ratio. The unit is also at risk of default on a $300 million bond maturing in 2026. In response, it has requested a six-month moratorium to restructure the debt. Rating agency Moody’s has warned that if the situation escalates and requires direct intervention from the parent group, ETI’s liquidity could be adversely affected.

“ETI’s rating could be downgraded if the Nigerian subsidiary’s recapitalization weakens the group’s credit profile, or if liquidity—already modest—further deteriorates,” Moody’s stated in a recent note. The agency also cited concerns over insufficient dividend flows from subsidiaries and a potential increase in ETI’s double gearing ratio.

To avoid these risks, it is critical for Ecobank Nigeria to restore its capital adequacy ratio above the regulatory minimum of 8%, a necessary step to retain investor trust and maintain compliance.