Arise BV, a leading African investment company, has made an additional Tier 1 (AT1) investment of approximately $75 million in Ecobank Transnational Incorporated (ETI) – the parent company of the Ecobank Group.
This was seen in a disclosure sent to Allnews Monday by ETI’s Head of Corporate Communications, Adenike Laoye, and sent to the Nigerian Exchange Limited (NGX).
According to the announcement, the recent investment is Basel III compliant and is the first AT1 instrument issued by Ecobank Transnational Incorporated. In light of this, the financial giant described it as; “a landmark transaction in the Sub-Saharan region.” The bank also revealed that the investment will help optimize and enhance its Tier-1 capital by $75 million.
This recent investment follows a previous groundbreaking $350 million subordinated Sustainability Eurobond issued by ETI in June 2021, which was very well received by international investors on several continents. The Eurobond has since been listed on the London Stock Exchange as Tier 2 capital.
comment on what she intends to use the money for; the pan-African banking group revealed that the additional investment would be used to meet its overall business obligations, including credit growth and strengthening the capital buffers of profitable subsidiaries in two of its key markets – Francophone West African and Anglophone West Africa.
tETI’s Group Chief Executive Officer, Ade Adeyemi, said of the development: ”This investment by Arise is a testament to the continued support and confidence of our shareholders; their commitment to and belief in our strategy that we will continue to focus on to deliver value to our shareholders and excellence to our customers. It is not only an improvement in our double leverage ratio, but also a good incentive for the company and its staff.”
On the other hand, Arise’s Chief Executive Officer, Deepak Malik, said: ”ETI is our main banking investment in Francophone West Africa and Anglophone West Africa. We fully support ETI’s growth ambitions and its ability to expand financial services to Agri, SMB and Retail clients. Our investment will also strengthen ETI’s balance sheet and provide additional venture capital.”
ETI had raised $350 million earlier in June this year with the issuance of its Tier-2 Sustainability Notes. The bonds maturing in June 2031 have a call option in June 2026 and were issued at a coupon rate of 8.75% with semi-annual arrears.
Arise BV (“Arise”) is a leading equity investor in financial institutions in Sub-Saharan Africa and one of ETI’s existing major institutional shareholders. It currently manages assets of more than $960 million in more than 10 African countries and has indirect banking exposure to more than 33 countries in Sub-Saharan Africa.