The Bank of Industry (BoI) has announced the completion of a £1 billion Guaranteed Senior Loan Facility to boost lending in the financial sector.
The bank said that the investment banks (Initial Mandated Lead Arrangers) and underwriters for the senior phase of the transaction which was led by the Africa Finance Corporation (AFC) and Standard Chartered Bank, included AbsoBank Limited; FirstAbuDhabiBankPJSC; FirstRand Bank Limited, London; Moshreqbonk PSC, NedbankLimited, London; and SMBCBank InternationalP.
BoI revealed this in a statement naming African Export-Import Bank (Afreximbank) as the agent bank for the transaction.
The bank also stated that following the general syndication, which a syndicate of institutions has expressed interest in, it has the option to extend the facility size to £1.5 billion.
Quoting the bank: “A syndicate of financial institutions arranged by the IMLAs has indicated strong interest in participating in the general phase of the ongoing syndication, and BOI has an option to increase the facility size up to EURO 1.5 billion after the general syndication.
“The deal is quite unique and the first of its kind by any financial institution in Nigeria both in terms of its size and structure.
“The transaction structure leverages the strong investment grade credit rating of AFC (rated A3 with a Stable Outlook by Moody’s) to wrap and credit-enhance BoI thereby benefitting from favourable terms that would otherwise not be available especially in these highly volatile markets.
“The pricing, at 3 months Euribor (floored at zero) + 1.65% per annum, is a result of this innovative structuring.”
This marks the fifth occasion BOI’s successful operations in raising funds in the international markets since 2018. With the conclusion of this transaction, total funds raised by the bank from 2018 to date is in excess of $5 Billion.
Commenting on the deal, the Managing Director of the Bank, Mr Kayode Pitan, said “At a time when international capital markets are shut to many borrowers, and when capital is prohibitively expensive, through this innovative transaction structure and the AFC Guarantee, BOI was not only able to raise liquidity but also able to diversify its funding sources and attract new lenders.”
“The proceeds of this deal, like in our previous ones, will be utilized to provide much needed medium to long term finance to Nigerian Micro Small and Medium Enterprises (MSMEs) and large enterprises with bankable transactions at affordable Naira interest rates,” he said.
According to the bank, it has provided over N1.2 trillion to over 4 million businesses between 2015 and 2021, resulting in the creation of over 9 million direct and indirect jobs.
It expressed gratitude to its majority shareholders including the Central Bank of Nigeria, CBN and its Committee of Governors saying: ‘‘We express deep appreciation to the Federal Ministry of Finance, Budget and National Planning and our supervising ministry, the Federal Ministry of Industry, Trade and Investment.’’
