Ecobank Transnational Incorporated (ETI), a leading Pan-African banking group and parent company of the Ecobank Group, has announced its plan to raise $300 million from the international debt capital markets through the issuance of Tier 2 qualifying sustainability notes.
The issuance will be in pursuant to the United States Securities and Exchange Commission Rule 144A and Regulation S (the “Notes”).
This bid, if successful, is expected to help re-finance the operations of the bank and to boost its operations.
In a press release signed by the Group Head of Corporate Communications, Adenike Laoye, the Banking Group explained that an equivalent amount of the net proceeds of the Notes will be used to finance or re-finance, in part or full, new or existing eligible assets in accordance with ETI’s Sustainable Finance Framework.
Nevertheless, tier 2 capital is a bank’s supplementary capital. They are more debt-like than tier 1.
However, the reasons why the Group is going for tier 2 notes, experts state that, tier 2 notes typically have an optional redemption feature that applies at least five years from issue date. The maturity is usually at least ten years from the issue date.
Also, the tier 2 capital includes undisclosed funds that do not appear on a bank’s financial statements, revaluation reserves. It also includes, hybrid capital instruments and subordinated term debts.
This could be a good option to raise the needed capital to boost the assets of the Ecobank Group.
The ETI, which is the parent company of the Ecobank Group, offers a full suite of banking products, services and solutions including bank and deposit accounts, loans, cash management, advisory, trade, securities, wealth and asset management.
Ecobank Transnational Incorporated is listed on the Nigerian Exchange Limited in Lagos, the Ghana Stock Exchange in Accra, and the Bourse Régionale des Valeurs Mobilières in Abidjan
Meanwhile, according to the press release, ETI intends to list the Notes on the London Stock Exchange, with the anticipation that the Notes will be traded on its regulated market.
Furthermore, the statement indicated that, the issuance of the notes will be subjected to prevailing market conditions after the conclusion of the necessary transaction documentation.
However, invitation has been extended to some leading stock markets in West Africa. Some of these markets to take part in the listing include the Nigerian Exchange Group Plc (NGX), Ghana Stock Exchange and the Bourse Regionale des Valeurs Mobilieres.
This will further strengthen performance of the Ghana Stock Exchange which has been the best stock market in Africa so far this year with a 13.96% gain in the first quarter of 2021. On the other hand, the Bourse Régionale des Valeurs Mobilières in Abidjan and the Nigerian Exchange Limited in Lagos have also been performing well since the turn of the year.
Ecobank Group is the leading independent pan-African banking group in Africa. They employ over 14,000 people and serves about 28 million customers in the consumer, commercial and corporate banking sectors across 33 African countries.
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