Ecobank signs $250m bridge-to-bond loan with Afreximbank, AFC

The Ecobank Transnational Incorporated (ETI) has signed a $250 million senior unsecured bridge-to-bond loan facility with the African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC).

Ayo Adepoju, the group chief financial officer of ETI, announced this in a statement filed on the Nigerian Exchange Ltd. (NGX) on Monday in Lagos.

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.

Through these loans, organisations get interim financing to meet urgent financial requirements while they prepare for longer-term capital-raising activities, such as issuing bonds.

Adepoju said Afreximbank and AFC would act as global coordinators and initial mandated lead arrangers to support trade finance and the general corporate purposes of the group.

He stated that Mashreq Bank psc. also joined the transaction as a mandated lead arranger.

According to Adepoju, the facility has a tenor of 12 months, with a six-month extension option at the lenders’ discretion.

“We are very excited about this new facility, which provides additional liquidity buffers for the bank,” he said.

“The firm’s continued ability to demonstrate market support and, in particular, diversify its funding sources under challenging economic conditions reflects credibility that has been purposefully built in the market and across the African continent over many years.

“The bridge-to-bond loan also comprises an accordion feature that enables an increase in the total commitments under the facility within a given timeframe.”

Ecobank Group is a private pan-African banking group present in 35 sub-Saharan African countries, as well as France, UK, UAE and China

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.

On March 11, 2024, TheCable reported that Guaranty Trust Holding Company (GTCO) Plc plans to raise between N450 billion and N525 billion through a public offer to support the capital base of its subsidiary, Guaranty Trust Bank (GTB).