Ecobank secures $250m facility to improve trade finance in Africa
TLDR
- $250 million senior unsecured bridge-to-bond Loan Facility finalized by ETI in partnership with Afreximbank and AFC for trade finance activities and general corporate needs.
- Twelve-month tenor with a six-month extension option and an accordion feature for increased commitments.
- Ecobank's Group CFO, Ayo Adepoju, pleased with market support and funding diversification in challenging economic conditions, enhancing company credibility.
Ecobank Transnational Incorporated (ETI) has finalized a $250 million senior unsecured bridge-to-bond loan facility in partnership with the African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC) as global coordinators and initial mandated lead arrangers. Mashreqbank psc. also participated as a mandated lead arranger.
The loan facility is designated to bolster trade finance activities and address the group's general corporate needs. It features a twelve-month tenor with an option for a six-month extension at the discretion of the lenders. Moreover, the bridge-to-bond loan includes an accordion feature, allowing for an increase in total commitments within a specified timeframe.
Ayo Adepoju, Ecobank’s Group CFO, expressed satisfaction with the firm’s ability to secure market support and diversify funding sources amid challenging economic conditions, reflecting the company's credibility.
Key Takeaways
Access to credit remains out of reach of many Africans and is a significant barrier to the growth of many small businesses. The continent has an estimated trade finance gap of $81 billion. It’s also a problem investors are particularly keen to address as they get attractive returns. More so, trade finance continues to be a relatively low-risk activity for commercial banks in Africa. The estimated default rate on trade finance transactions in 2011 and 2014 were 4% and 5% respectively compared to 9% and 12% Non-Performing Loan (NPL) ratios for all bank asset classes.
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