Moody’s upgrades Ecobank ratings outlook to stable
Ecobank building
Moody’s has affirmed Ecobank Transnational Incorporated’s (ETI) B3/Not Prime long- and short-term issuer ratings; B3 senior unsecured debt rating; b2 notional Baseline Credit Assessment (BCA); and b1 Adjusted BCA. At the same time, rating analysts at Moody’s said they have changed the outlook on the group’s long-term issuer and senior unsecured debt ratings to stable from negative.
ETI’s subsidiaries operate across 38 countries—including 35 African countries- and total assets of $28.9 billion as of March 2025, details from the rating note highlighted. Moody’s said the decision to change the outlook to stable on the long-term issuer and senior unsecured ratings reflects ETI’s resilient financial performance.
The rating upgrade also takes into consideration higher dividends being upstreamed to ETI, resulting in lower double leverage and reduced refinancing risk.
The rating adjustment also reflects an expectation that the recapitalization process of Ecobank Nigeria Limited will be completed by the end of 2025, with limited impact on the group’s financial fundamentals.
“The stable outlook also captures our expectation that a series of capital-boosting initiatives and actions to cure Ecobank Nigeria’s total capital position will be completed before the end of 2025”, according to the ratings agency.
In May 2025, ETI received shareholder approval to raise $250 million in Additional Tier 1 (AT1) capital and announced the launch of the transaction effective 9 July 2025, of which a portion is expected to be downstreamed to Ecobank Nigeria as AT1 capital during Q3-2025.
Ecobank Nigeria’s plan to raise $200 million in AT1 capital was noted in the rating note. The ratings analysts said they consider
“We also note that Ecobank Nigeria’s recent successful offer to tender $150 million of its February 2026 $300 million notes and consent to remove the capital adequacy ratio covenant from this bond’s terms alleviates risks of an event of default in Nigeria that would trigger cross default at ETI level”.
“Over the past year, ETI has shown resilience in its financial performance, which supports our change in outlook to stable. Liquidity risks are being moderated by the group’s gradually improving profitability during 2024 and Q1-2025.
“This has translated into a 22% increase in dividends upstreamed to ETI during 2024, these being received from 22 dividend-paying subsidiaries compared to just 14 in 2021”.
In turn, albeit high, ETI’s double leverage ratio – which measures the liquidity risk taken on by the holding company, as a result of it borrowing in order to invest in the equity of its subsidiaries – has eased to 168% as of December 2024 from 173% in 2023.
Additionally, the stable outlook reflects reduced liquidity risk at the holding company level with the refinancing of short-term liabilities in 2024 with longer-term funding.
Moody’s said this is underpinned by demonstrated market access, notably through senior unsecured notes issuance of $400 million in October 2024 and a tap increase of $125 million in May 2025, maturing in October 2029.
ETI’s B3 long-term issuer ratings affirmation reflects the affirmation of the group’s b2 notional BCA; the affirmation of the group’s b1 adjusted BCA as captured by a one-notch uplift for affiliate support reflecting Moody’s assessment of a moderate probability that the firm’s major institutional shareholders would extend support to the group.
Moody’s said asset quality for the group has improved over recent years.
