- Africa Finance Corporation Issues US$500 Mllion 7-year Eurobond
Africa Finance Corporation (AFC) has issued a US$500 million 7-year Eurobond. The senior, unsecured Eurobond which carries a coupon of 3.875 per cent was priced to yield at four per cent and matures in April 2024.
A statement from the AFC on Tuesday stated that the Eurobond received strong global interest, with an order book of US$2.4 billion. This showed that it was about five times over-subscription from 231 investors across the Middle East, Asia, the United Kingdom, Europe and the United States.
Prior to the launch of the bond, AFC conducted a roadshow in London, Hong Kong, Singapore, the UAE, and the United States.
The bond was AFC’s second benchmark Eurobond issuance under the Corporation’s US$3 billion Global Medium Term Note Programme. The bond was rated A3 by Moody’s Investor Services 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%), United States (25%), United Kingdom (24%), Asia (18%) and the Middle East (4%).
AFC is only the second African development finance institution to issue a Eurobond with maturity longer than five years. This, the statement explained was a reflection of the corporation’s strong credit standing and its ability to match-fund medium to long-dated infrastructure investments.
Commenting on the issue, the President/Chief Executive Officer, AFC, Andrew Alli said: “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 US$4 billion in 28 African countries.
“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.”
Commenting on the issue, the Director and Corporate Treasurer of AFC, Banji Fehintola added: “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.
“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.”
Meanwhile, Hogan Lovells, a leading global law firm providing business-oriented legal advice and high-quality service across its breadth of practices to clients around the world is set to be the headline legal sponsor at AFC Live, a key industry infrastructure investment summit hosted by the AFC
The two-day infrastructure summit which is slated to hold in Abuja on the 15th and 16th May 2017, will include panel discussions and thematic debates, as well as case study presentations and interactive sessions centred on the African infrastructure revolution. Case studies will be shared in five key sectors: Energy & Power, Transport & Logistics, Telecommunications, Natural Resources and Heavy Industries. B2B meetings will provide a platform for participants to pitch to potential investors and financiers and a networking cocktail reception on the eve of the forum, as well as a Gala dinner will also be organised.
Partner and Head of Hogan Lovells’ Africa Practice, Andrew Skipper said: “ We are thrilled to be the lead legal sponsor for this event because we believe in and want to support business on the continent. Infrastructure plays an incredibly important part in any country’s growth story and in Africa, it is vital”.
Speaking further on the challenge of project funding, Andrew said: “African-focused DFIs, Export Credit Agencies or foreign grant funds cannot entirely fund the continent’s infrastructure needs. International investors and commercial lenders need to adjust their thinking on a range of issues in order to encourage an appropriate view on acceptable risk allocation and investor returns in these sometimes complex markets.”