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Erudite AfricaCenter of Excellence
← Debt Capital Markets (DCM)

Structuring, pricing and rating a bank bond

Module 04 / 5 · 70 min

Structure Bank A's five-year ETB 2 billion bond: use of proceeds, fixed or floating coupon, senior or Tier 2, a price built from the T-bill curve, a credit rating and a book-building plan.

In this module you will learn to

  • Choose tenor, coupon type, ranking and covenants for a corporate or bank bond and defend the trade-offs
  • Explain when a subordinated bond can serve as Tier 2 capital and compute its effect on a bank's capital ratio under SBB/95/2025
  • Build a new-issue yield from the benchmark curve, credit spread and liquidity premium, then refine it through book-building
  • Explain rating methodologies, the sovereign ceiling and local-currency rating scales

Built on

  • Erudite Africa training module: Ethiopian Context, topic 3.f Debt Capital Markets, Levels 1 and 2 (October 2026)
  • Capital Market Proclamation No. 1248/2021; ECMA Directive No. 996/2024 (fees); ECMA public offer directive (reported as No. 1030/2024); ESX Rulebook (December 2024)
  • National Bank of Ethiopia Proclamation No. 1359/2025; NBE Directives SBB/95/2025, SBB/87/2024, SBB/72/2019, SBB/98/2025, FXD/01/2024 as amended by FXD/04/2026, NBE/INT/13/2026; MPC release No. 7 (July 2026)
  • Ministry of Finance, Public Sector Debt Statistical Bulletin No. 56 (February 2026)
  • ICMA Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines; G20 Common Framework for Debt Treatments
  • Commercial Code of 2021 (reported as Proclamation No. 1243/2021)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.