AFC raises $400m syndicated loan for post-pandemic recovery, infrastructure investment

18th January 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

Private sector-led infrastructure finance provider the Africa Finance Corporation (AFC) has raised $400-million in a syndicated loan to support the post-pandemic recovery through critical development of infrastructure.

The proceeds will facilitate upcoming infrastructure projects that address the continent’s developmental challenges. The three-year facility was increased from an initial target of $300-million, as strong interest from investors led to the offering being 2.5 times oversubscribed.

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

“The transaction demonstrates the confidence of banking partners, old and new, in AFC’s strong credit risk profile and broadening global appeal in the capital markets. 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,” says AFC senior director and treasurer Banji Fehintola.

“We remain committed to partnering with experienced, like-minded organisations to provide sustainable finance for infrastructure development in Africa, while achieving the lowest borrowing costs of any institution on the continent.”

Financial services firms Absa Bank, through its Corporate and Investment Banking division; the Bank of China London Branch; First Abu Dhabi Bank; ICBC London; Mashreq Bank; MUFG Bank; Nedbank London Branch; Rand Merchant Bank London Branch; Standard Chartered Bank; and SMBC Bank International acted as bookrunners and mandated lead arrangers.

The Korea Development Bank and Standard Bank of South Africa acted as mandated lead arrangers. MUFG Bank also acted as facility agent and ICBC London as documentation agent.

Additionally, ratings agency Moody’s has raised its outlook for the 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, the AFC says.