Global law firm Norton Rose Fulbright has advised Ecobank Transnational Incorporated (“ETI”) on its $350 million 8.75% Fixed Rate Reset Tier 2 Sustainability international bond issue, listed on the sustainable bond market of the London Stock Exchange. This is the first ever Tier 2 Sustainability bond issued by a financial institution in Sub-Saharan Africa, and the first to have a Basel III-compliant 10 year no-call 5 structure outside of South Africa.
ETI is the holding company for the leading pan-African banking group with a presence in 35 African countries across Western, Central, Eastern and Southern Africa, with group international offices in Paris, London, Dubai, Beijing, Johannesburg and Ethiopia. The group is systemically important across sub-Saharan Africa, servicing regional and global corporations, governments, international organisations and approximately 28 million customers.
An equivalent amount of the net proceeds from the bond will be used by ETI to finance or re-finance new or existing eligible green or social assets in ETI's published Sustainable Finance Framework, on which DNV has issued a Second Party Opinion. ETI’s Framework was developed with the objective of reinforcing the Group’s capabilities in financing green and social projects which contribute to the United Nations Sustainable Development Goals. The Framework is in line with the International Capital Markets Association (“ICMA”) Green Bond Principles (2018), the ICMA Social Bond Principles 2020, the ICMA Sustainability Bond Guidelines 2018, the Loan Market Association (“LMA”) Green Loan Principles 2021 and the LMA Social Loan Principles 2021. Eligible Green assets include renewable energy; green buildings; sustainable water and wastewater management; and clean transportation. Eligible Social assets include employment generation; affordable basic infrastructure; access to essential services (healthcare); access to essential services (education); and affordable housing. ETI has committed to publish annual third party allocation and impact reports on its eligible projects until the net proceeds from the bond are fully allocated.
The transaction was anchored by the Dutch development bank FMO, with a committed US$50 million order at launch.
Investor interest was global, including accounts from the United Kingdom, the United States, the Middle East, Africa and Asia. The offering was heavily over-subscribed, particularly with orders from investors (both asset managers and supranationals) from the United Kingdom, Europe and Africa.
The joint bookrunners and lead managers were Citi, Mashreq, Renaissance Capital and Standard Chartered.
The Norton Rose Fulbright team advising ETI was led by London-based debt capital markets partner Peter Young, with assistance from counsel Vishal Mawkin and associate Miguel Torres Caro. Peter Young commented:
“We are absolutely delighted to have advised ETI on its Tier 2 Sustainability bond, the first by a financial institution in sub-Saharan Africa, affirming ETI’s commitment to sustainable financing. This marks a milestone for this leading pan-African banking group, which operates in multiple emerging and frontier markets with evolving political, economic and regulatory challenges. This transaction builds on our experience advising this important client on its issue of convertible bonds – listed on London’s International Securities Market – to strategic investors in 2017, and its inaugural $500 million Rule 144A/Regulation S international bond issue, listed on the London Stock Exchange in 2019.”