Ecobank Transnational Incorporated (ETI) has announced its successful tap of U.S.$400 million 10.125% Notes due October 15, 2029, raising an additional U.S.$125 million
The offering was issued at a premium with a new issue price of 102.634, or an effective yield of 9.375%, representing a 100-basis-point tightening in yield compared to the original issue.
According to the Pan African Bank’s press release of May 19, 2025, the Notes will be consolidated into a single series with the original issuance made on October 15, 2024.
Investor appetite was robust, with final order book oversubscription exceeding 2x, drawing interest from asset managers, banks, and development finance institutions across Africa, the UK, Europe, the US, Asia, and the Middle East.
The proceeds will be used primarily to refinance upcoming debt maturities, according to the Group, aligning with its strategy to optimize capital structure.
“This tap enhances our financial flexibility and further reinforces our presence in the global capital markets,” said Jeremy Awori, Group CEO of ETI.
Group CFO Ayo Adepoju added that the issuance supports ETI’s goal of extending debt maturity and diversifying funding sources.
He also acknowledged the support of Absa, AFC, Afreximbank, Mashreq, Standard Chartered, EDC, and Renaissance Capital Africa in executing the transaction.
Insights
Ecobank Transnational Incorporated’s successful $125 million Eurobond tap at a lower yield of 9.375% compared to 10.125% in the original October 2024 issuance reflects improved market pricing.
The tap was oversubscribed by more than 2x, indicating strong interest from a diverse investor base.
ET recent financial statements show that:
- Borrowed funds stood at N3.341 trillion as of March 2025, marginally up from N3.333 trillion in December 2024.
- Interest expense on borrowings in Q1 2025 was N70.18 billion (US$45.94 million), slightly higher than N69.54 billion (US$51.83 million) recorded in Q1 2024 indicating higher cost in local currency terms, though marginally lower in USD terms, likely reflecting exchange rate effects.
- For FY 2024, total interest expense on borrowings increased to N305.7 billion (US$205 million) from N117.9 billion (US$182 million) in 2023, driven by both increased debt levels and elevated interest rates.
While the new issuance was priced more favorably, it adds to the group’s USD-denominated debt portfolio, which continues to carry currency and interest rate risk, particularly in a volatile macro environment.
Ecobank has stated that the proceeds will be used primarily for refinancing existing obligations. The outcome of this issuance may offer the group some breathing room, but refinancing risk, debt servicing costs, and FX exposure remain key variables to monitor going forward.
