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AFC raises $233 million and ¥1 billion in debut Samurai facility

13 Sep 2019, 10:45 am
Financial Nigeria
AFC raises $233 million and ¥1 billion in debut Samurai facility

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The dual-currency facility is the largest debut Samurai loan by an African issuer.

President and CEO of AFC, Samaila Zubairu

Africa Finance Corporation (AFC), an investment-grade multilateral finance institution, today announced its successful closure of a general syndication, which raised $233 million and ¥1 billion.

The facility, which comprises two tranches – US dollar-denominated Tranche A and Japanese yen-denominated Tranche B – carries a tenor of three years, and it is AFC's first Asian-currency denominated loan facility.

AFC said in a statement today that the facility constitutes an important step as the corporation builds a broad coalition of investors to diversify its funds and allow institutions from around the globe to participate in Africa's development.

The fundraise was well received in the Japanese loan market, leading to the issue being significantly over-subscribed, according to AFC.

The dual-currency facility is the largest debut Samurai loan by an African issuer.  A Samurai loan is a loan issued in Japanese yen by a foreign borrower in Japan. The AFC facility was signed on 6 September, 2019 with eight Japanese lenders committing to it and launched into general syndication on 23 July, 2019 at a launch amount of $150 million.

AFC said the proceeds from the facility will be used for general corporate purposes in accordance with the corporation's Establishment Agreement and the Charter.

"The market's keen interest in participating in AFC's clearly defined African growth strategy is demonstrated by the wide pool of lenders that supported the syndication,” said Samaila Zubairu, President and CEO of AFC. “The success of this loan offering is testament to AFC's ability to diversify our funding sources as we build a coalition of investors to support our mandate of providing solutions to Africa's infrastructure deficit as well as to our strong fundamentals as an investment-grade institution."

MUFG Bank, Ltd. and Sumitomo Mitsui Banking Corporation acted as Mandated Lead Arranger and Bookrunner, respectively.

AFC was established in 2007 with an equity capital base of $1 billion, to be the catalyst for private sector-led infrastructure investment across Africa. With a current balance sheet of approximately $4.5 billion, AFC is the second-highest investment-grade-rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody's Investors Service.

AFC has successfully raised $650 million in 2019, $500 million in 2017 and $750 million in 2015 through Eurobonds. All Eurobond issues were oversubscribed and attracted investors from Asia, Europe and the USA.

According to the corporation, AFC invests in high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the corporation has invested over $4.5 billion in projects in 29 countries across Africa.

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