Ecobank Nigeria Ltd. issued $300 million senior unsecured loan participation notes, at a coupon of 7.125% per year, via its financial vehicle EBN Finance Company B.V.
In our view, the notes satisfy the conditions to equalize the rating with that of the issuer.
We are therefore assigning our ‘B-‘ long-term issue rating to the senior unsecured notes.
S&P Global Ratings has assigned its ‘B-‘ long-term issue rating to the $300 million senior unsecured loan participation notes (LPNs), at a coupon of 7.125% per year, issued by Nigeria-based Ecobank Nigeria Ltd. (ENG; B-/Stable/B) via its financial vehicle, EBN Finance Company B.V. The rating is based on our analysis of the notes’ final documentation.
We rate ENG’s U.S. dollar-denominated senior unsecured LPNs at the same level as our long-term issuer credit rating on ENG. This is based on our conclusion that the LPNs meet all conditions regarding issuance by special-purpose vehicles (SPVs) set out in our group rating methodology.
Specifically, we rate LPNs issued by an SPV at the same level as we would rate equivalent-ranking debt of the underlying borrower (the sponsor) and treat the contractual obligations of the SPV as financial obligations of the sponsor if the following conditions are met:
All of the SPV’s debt obligations are backed by equivalent-ranking obligations with equivalent payment terms issued by the sponsor;
The SPV is a strategic financing entity for the sponsor set up solely to raise debt on behalf of the sponsor’s group; and
We believe the sponsor is willing and able to support the SPV to ensure full and timely payment of interest and principal on the debt issued by the SPV when it is due, including payment of any of the SPV’s expenses.
The purpose of the LPNs is to finance a loan to ENG. The issue will mature on Feb. 16, 2026.