Ecobank Transnational Incorporated (NGX: ETI), says it has signed a USD 250 million senior unsecured bridge-to-bond loan facility with African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC).
The bank disclosed this in a corporate action filed on the Nigerian Exchange on Monday.
According to the document seen by Investogist, the African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC) are acting as Global Coordinators and Initial Mandated Lead Arrangers to support trade finance and the general corporate purposes of the group.
The document further stated that Mashreqbank psc. joined the transaction as a Mandated Lead Arranger.
The facility has a tenor of twelve months, with a six-month extension option at the lenders’ discretion.
“The bridge-to-bond loan also comprises an accordion feature that enables an increase in the total commitments under this facility within a given timeframe,” the document stated.
The bridge-to-bond loan comes three months after Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), said banks will be directed to recapitalise.
Bridge-to-bond loans refer to short-term financing solutions that serve as a bridge between a firm’s immediate funding needs and its long-term financing plans. It allows the borrower to meet current obligations by providing immediate cash flow while they prepare for long-term capital raising activities, like issuing bonds.
Commenting on the facility, Ayo Adepoju, Ecobank’s Group CFO, said, “We are very excited about this new facility, which provides additional liquidity buffers for the bank. The firm’s continued ability to demonstrate market support and, in particular, diversify its funding sources under challenging economic conditions reflects the amount of work that has been done in cementing relationships and building credibility in recent years.”
Ecobank Transnational Inorporated is yet to release its financial statements for the year ended 31 December, 2023. However, in the nine months ended 30th September 2023, the group Group net revenue (net interest income plus non-interest revenue) was $1,518 million.
The Group profits available to shareholders of ETI was $224 million for the first nine months of 2023 compared with $196 million in the similar period of 2022.
It noted that the increase in revenue was driven by the net impact of higher interest rates, particularly in Anglophone West Africa (AWA) and Nigeria, growth in the volume of interest-earning assets, significantly higher fees from treasury services and solutions, and higher cash management fees.
According to the nine months financial statements, the ETI Borrowed funds and other liabilities (excluding deposits from customers and banks) was N3.50 billion as at 30th September 2023.
Ecobank Group is the leading private pan-African banking group with unrivalled African expertise. Present in 35 sub-Saharan African countries, as well as France, UK, UAE and China, its pan-African platform provides a single gateway for payments, cash management, trade and investments. The Group employs over 15,000 people and offers Consumer, Commercial, Corporate and Investment Banking products, services and solutions across multiple channels including digital, to over 32 million customers
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
