Fitch lifts Ecobank Transnational

Fitch Ratings said it upgraded Ecobank Transnational Inc.’s long-term issuer default rating to B from B- and viability rating to B from B-.

Long-term foreign currency IDR: upgraded to ‘B’ from ‘B-’; Stable Outlook

The agency also said it affirmed the company’s short-term foreign-currency issuer default rating at B.

The outlook is stable.

The ratings are based on the company’s intrinsic creditworthiness as reflected in its viability rating, Fitch said.

The upgrade reflects its stronger capitalization following Nedbank’s acquisition of a 20% stake in the group in October 2014, the agency said.

Upon acquisition of the stake, Nedbank converted $285 million outstanding subordinated loans, which were accounted for as regulatory tier 2 capital, into equity and injected an additional $208 million, Fitch said.

This improved the company’s core capital ratio to about 16% and double leverage declined materially to about 104%, the agency said.

The upgrade also considers an assumption that the company will maintain high capital ratios and low double leverage, Fitch said.

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