Recommendation unchanged: We are keeping our Buy recommendation on the Ecobank Transnational (ETINL) 9.5% 2024 bond for now. We acknowledge that the bond now yields much less than when it was issued (9.75% at issue versus mid YTM of just over 6% at the time of writing).
However, with the redemption of the US$250mn Ecobank Nigeria (ECOTRA) 8.75% subordinated bond now just weeks away, we think near-term technicals remain favourable.
Further, on the recent conference call, management confirmed that just under 20% of the US$500mn ETINL bond was allocated to DFIs, which are anchor investors. Therefore, the effective ‘free float’ is lower than the issue size.