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THE African Export-Import Bank (AfreximBank) says it has successfully closed a US$1,3 billion dual tenor bond issuance, the bank’s largest-ever transaction in the international debt capital markets.
This is a major milestone for AfreximBank and is the bank’s largest transaction in the debt capital markets to date.
The development fulfils a number of key objectives of the bank’s liability management strategy, which include diversification of the liability book by geography, investor type and tenor as well as reducing cost of funds, said Afreximbank in a latest media update.
“Afreximbank printed a US$600 million five-year note at a spread of T+185bps and a US$700 million 10-year note at a spread of T+220bps, after achieving a final order book of US$4,5 billion,” it said.
“The Initial Pricing Thoughts (IPTS) were announced at T+220bps area and T+250bps area for the five-year and 10-year tranches, respectively.
“Backed by strong demand, the combined books peaked at US$5 billion, with a slight skew towards the five-year tranche, seeing pricing set at T+185 bps to a re-offer yield of 2,634 percent and T+220bps to a re-offer yield of 3,798 percent, respectively. The 10-year tranche was finally priced at only a 5bps New Issue Premium (NIP), while the five-year was priced flat to fair value.”
The closing of the transaction is evidence of the bank’s growing capability to harness competitively priced long dated resources into Africa and fund investments that will have a positive impact on trade on the continent, said Mr Denys Denya, Afreximbank’s executive vice president responsible for treasury soon after the closing last week.
“This landmark deal confirms continuing investor deep confidence in AfreximBank’s mission and credit story, and achieving competitive pricing for both tranches is testament to the strength of support from investors from all key financial markets across the globe.
“Importantly, the success of this transaction enables the bank to continue to play a major role in the development of intra-African trade as well as trade between Africa and the rest of the world.”
AfreximBank’s advisory and capital markets unit (ACMA) acted as sole financial advisor on the transaction, while partners in arranging the transaction were HSBC Bank plc, which acted as sole coordinator and joint lead manager/book runner as well as MUFG, Emirates NBD Bank PJSC, Commerzbank and Standard Chartered Bank.
Prior to pricing the transaction, Afreximbank said it met with both new and existing investors during well-attended virtual roadshows covering Africa, Gulf countries, Europe, Asia and USA.
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