FINANCIAL house Ecobank Nigeria has listed its $300 senior unsecured bond on the London Stock Exchange (LSE) as part of an ambitious move to increase liquidity and attract more international shareholders.
Floated in 1985 by bankers and the governments of the Economic Community of West African States (Ecowas) member states, Ecobank was created to offer low interest loans across the cub-region as part of a programme to spur economic growth. Today, Ecobank has banking operations in 36 African countries and representative offices in Angola, China, Dubai, France, South Africa, and the UK.
With more than 1,500 branches in 35 countries, the Ecobank-Nedbank Alliance is the largest banking network in Africa after it was formed in 2008 following a pact between the Ecobank Group and the Nedbank Group, one of South Africa’s four largest financial services providers. At the moment, Ecobank shares are traded on the Ghana Stock Exchange, the Nigeria Stock Exchange and the BRVM stock exchange in Abidjan, Ivory Coast.
Among the bank’s major shareholders are the Qatar National Bank, which has a stake of 17.4% and JP Morgan Bank Luxemburg, which owns a 2% stake. In a bid to extend this ownership, Ecobank has floated its bond on the LSE as part of a major European expansion drive.
Last Thursday, Ecobank opened the market at the LSE via a virtual ceremony to mark the listing of the bond. Not surprisingly, the successful launch was three times oversubscribed and is the lowest coupon/yield by a Nigerian financial institution for a benchmark bond transaction since 2013.
Ecobank issued a formal; statement saying: “The bond carries a coupon rate of 7.125%, significantly below its initial price thoughts of 7.75%. It has an issuer rating of B- from Fitch Rating Agency and S&P Citi, Mashreq, Renaissance Capital and Standard Chartered Bank acted as joint lead managers and bookrunners.
“The proceeds will provide medium term funding and help to enhance the capacity of the bank to support international trade and service across Africa.”
Patrick Akinwuntan, the managing director, of Ecobank Nigeria, added: “The strong demand for our bond shows the international appetite for the Ecobank franchise in Nigeria, its unique positioning for facilitating pan-Africa trade and the attractive opportunity for the many investors seeking to back world-class Nigerian corporates.”
Ecobank Nigeria, a subsidiary of Ecobank Transnational Incorporated, the parent company of the Ecobank Group, provides the full suite of banking products, services and solutions through multiple channels to retail, commercial, corporate and public sector customers. In the early 1980s when Ecobank was founded, the West African banking industry was dominated by foreign and state-owned banks, with hardly any local commercial banks owned and managed by the African private sector, which the bank was designed to address.