Ecobank and Afreximbank Sign a $250 million Bridge-to-Bond Loan
Ecobank Transnational Incorporated (ETI) has inked a $250 million senior unsecured bridge-to-bond loan facility, with African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC) serving as the Global Coordinators and Initial Mandated Lead Arrangers. The purpose of the loan is to support trade finance and fulfil the general corporate needs of ETI.
This information was contained in a disclosure on the NGX website, signed by the Group’s Chief Financial Officer, Ayo Adepoju.
Emirati bank, Mashreqbank psc is also acknowledged as a Mandated Lead Arranger for the loan facility in the statement. The facility spans twelve months initially, with the possibility of a six-month extension at the discretion of the lenders.
According to the statement, the bridge-to-bond loan also incorporates an accordion feature, allowing for an expansion of total commitments within a specified period under this facility. In simpler terms, the borrower (Ecobank) can access additional funds if needed, with the terms of the loans providing flexibility to adjust to changing financial requirements or opportunities during the loan’s term.
Speaking on the loan facility, the CFO of Ecobank, Ayo Adepoju noted,
“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.”
Bridge-to-bond loans are short-term financing solutions that serve as a bridge between a company’s immediate funding needs and its long-term financing plans, typically in the form of issuing bonds.
These loans provide interim financing for companies to meet urgent financial requirements while they prepare for longer-term capital-raising activities, such as issuing bonds.
