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Ecobank Investors Reject Debt-Equity Swap, As Bank Repays $400m Convertible Bond

Ecobank Transnational Incorporated’s $400 convertible bond has been fully repaid after the holders refused to activate their right to convert the debt into ordinary shares.

The development is coming amid dollar scarcity which has driven the naira to trade around N815 per dollar.

ETI said in a release on Tuesday that it has, “Repaid upon maturity the 5-year $400m convertible debt issued in September and October 2017,”

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This was after the bond holders refused to exercise their options of converting their holding into ordinary shares after five years, the bank admitted.

When Ecobank issued the instrument in 2017, holders had between October 19 2019 to October 13 2022 to exercise the option.

The debt was issued with a coupon of 6.46 per cent above 3-month LIBOR.

The conversion price was 6 US cents.

But the bank said, “The holders of the convertible debt did not exercise their option to convert their holding into ordinary shares during the conversion period of 19 October 2019 to 13 October 2022.

“As a result, ETI redeemed the debt at 110 per cent of the principal amount, in line with the terms of the convertible debt agreements.

“In addition, the repayment did not affect ETI’s regulatory capital since the debt had been fully amortized for capital in 2021.”

Between 2016 to 2021, the Group failed to pay dividend until May 2022 when it paid $40m as dividend.

Ecobank PlcEcobank Transnational Incorporatednaira devaluation
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