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AFC raises $400m in syndicated loan for African infrastructure

Staff writer
Jan. 20, 2022, 3:09 p.m.
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Africa Finance Corporation has raised $400m in a new syndicated loan to support the post-pandemic recovery through critical development of infrastructure.

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Africa Finance Corporation has raised $400m in a new syndicated loan to support the post-pandemic recovery through critical development of infrastructure.

The 3-year facility – the first from AFC since 2018 – was increased from an initial target of $300m as strong interest from investors led to the offering being 2.5 times oversubscribed.

The proceeds will facilitate upcoming infrastructure projects that address the continent’s developmental challenges.

“The transaction demonstrates the confidence of banking partners, both old and new, in AFC’s strong credit risk profile and broadening global appeal in the capital markets,” said Banji Fehintola, Senior Director & Treasurer at AFC.

“This loan will be instrumental in working towards plugging the infrastructure gap we are facing on this continent, especially following the damaging effects of the Covid-19 pandemic. We remain committed to partnering with experienced, like-minded organizations to provide sustainable finance for infrastructure development in Africa, while achieving the lowest borrowing costs of any institution on the continent.”

Moody’s recently improved its outlook for AFC’s investment grade credit ratings to ‘stable.’

Its senior unsecured ratings at A3 and short-term issuer ratings at P-2 are the second highest of any institution in Africa.

New relationships forged with the diverse pool of international investors behind the syndicated loan will enable flexible financial instruments and further diversification of AFC’s investment portfolio.

Absa Bank, Bank of China (London Branch), First Abu Dhabi Bank PJSC, ICBC (London), Mashreq Bank PSC, MUFG Bank, Nedbank (London Branch), Rand Merchant Bank (London Branch), Standard Chartered Bank and SMBC Bank International acted as Bookrunners and Mandated Lead Arrangers.

Korea Development Bank and Standard Bank of South Africa acted as Mandated Lead Arrangers.

MUFG Bankand ICBC (London) also acted as Facility Agent and Documentation Agent respectively.

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