Ecobank plan to sell Eurobonds yielding at 10%

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Friday, April 12,2019

Ecobank set to sell Eurobonds yielding almost 10%

Ecobank Transnational Inc. plans to sell $400 million of Eurobonds at yields that may rank among the highest from emerging markets this year. One of Africa’s most geographically diverse lenders is offering five-year senior unsecured notes that may be priced at 9.75 percent, according to information from a person familiar with the matter, who asked not to be identified because they’re not authorized to speak publicly about it. The funding will enable the lender to meet its general corporate obligations; including the refinancing of a portion of debt it owes banks.
Those yields would be about the juiciest since Ecuador sold $1 billion of 10-year sovereign debt at 10.75 percent in January, according to data compiled by Bloomberg. Yields on those securities have dropped to 9 percent as sentiment toward emerging markets improved and the government secured a $4.2 billion loan package from the International Monetary Fund.

Ecobank raised $200 million in loans last year, which are due for repayment in November. Many lenders in its biggest market of Nigeria are looking to raise funding to finance their operations or increase capital reserves after a 2016 recession triggered a surge in non-performing loans and stricter accounting rules increased impairments.

No Nigerian-listed bank has sold Eurobonds since October 2017, when Fidelity Bank Plc issued $400 million of five-year securities yielding 10.75 percent. The price on those has since risen, sending the yield down to 8.79 percent as of 3:40 p.m. in London.
Lome, Togo-based Ecobank couldn’t immediately comment when contacted by phone. Net income jumped 44 percent to $328 million in 2018, while operating income was little changed at $1.8 billion

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