S&P World speaks on Ecobank Nigeria’s outlook

S&P World Scores has stated it may revise the outlook to steady if Ecobank Nigeria efficiently implements its capital-boosting measures or achieves vital recoveries on its FX-denominated loans throughout the subsequent six months.

“If the financial institution receives the capital injection from its mother or father throughout the subsequent couple of months, we anticipate that it’s going to not be in breach of the minimal CAR. This is able to in all probability take away the chance related to the bond acceleration. If it doesn’t obtain the promised help, we predict default seems inevitable. Due to this fact, we revised Ecobank Nigeria’s stand-alone credit score profile (SACP) to ‘cc’ from ‘ccc’,” the report said.

Ecobank Nigeria has introduced a young supply to purchase again $150 million, or half of its excellent senior unsecured Eurobond at par, along with accrued curiosity. The supply contains an early tender premium of $12.5 per $1,000 of the principal quantity (1.25%) and the almost certainly settlement date shall be July 8, 2025.

The financial institution can also be soliciting consent from its noteholders to take away the capital adequacy covenant on the remaining notes. The financial institution is providing an early consent payment of $2.50 per $1,000 of the principal quantity. The covenant was beforehand waived till Sept. 30, 2025.

To bolster its capital adequacy, we anticipate Ecobank Nigeria to pursue further measures, similar to issuing an extra $150 million in AT1 devices. That stated, the unsure financial setting may make it harder to spice up capital by such means. We consider {that a} default or a distressed alternate seems inevitable throughout the subsequent six months, except the financial institution can efficiently bolster its capital or get better vital quantities from loans denominated in foreign currency echange (FX).