AFC raises $500 million from Eurobond to finance development projects

11 Apr 2017
Financial Nigeria


The AFC said the seven-year bond is its second benchmark Eurobond under a $3 billion Global Medium Term Note Programme.

CEO, African Finance Corporation, Andrew Alli

The African Finance Corporation (AFC) announced today that it has issued a $500 million Eurobond to raise funds for financing projects that drive growth and development in Africa.

The AFC said the seven-year bond is its second benchmark Eurobond under a $3 billion Global Medium Term Note Programme. The senior, unsecured Eurobond matures in April 2024, carrying a coupon of 3.875 percent and priced to yield 4 percent.

“AFC has been committed for the last ten years to investing in projects that drive sustainable growth and development in Africa. In that time, we have invested over $4 billion in 28 African countries,” said Andrew Alli, AFC’s Chief Executive Officer.

“Key to delivering this are our fund-raising activities around the world, promoting the very real investment opportunities that exist in African infrastructure. The strong interest in this bond reflects investors' confidence in AFC's credit, strategy and risk management culture, as well as appetite for exposure to the returns available in African markets.”

The AFC said the Eurobond issue follows other successful capital market issuances, starting with a debut $750 million Eurobond in April 2015. The 2015 Eurobond was priced to yield 4.595 percent for a five-year tenor, maturing in April 2020.
Last year, the corporation issued its debut senior, unsecured three-year Swiss Franc-denominated bond, raising CHF100 million. Earlier this year, the AFC also issued its maiden $150 million three year Sukuk – which is reputed to be the highest-ever rated Sukuk issuance from an African institution and the first Sukuk to be issued by an African supranational entity.

“After a successful debut Eurobond issuance in 2015, AFC has consistently engaged investors through a series of non-deal roadshows and other debt capital market issuances,” said Banji Fehintola, the AFC’s Director and Corporate Treasurer.

“The tremendous success of our second Eurobond issuance attests to the fact that investors continue to seek exposure to high quality, investment grade credits like AFC. This is indeed a solid endorsement of AFC's strong business fundamentals, governance, funding strategy and risk management.”

The latest Eurobond has been rated A3 by Moody's, which is in line with AFC's issuer rating. The bond will be listed on the Irish Stock Exchange. The Eurobond was distributed to investors in Europe (29 percent), United States (25 percent), United Kingdom (24 percent), Asia (18 percent) and the Middle East (4 percent).

AFC said it is the second African development finance institution – after the African Development Bank – to issue a Eurobond with maturity longer than 5 years. Citi, J.P. Morgan, MUFG, and Standard Chartered Bank acted as joint lead managers and book-runners for the U.S. dollar-denominated bond issuance.

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