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Africa Finance Corporation Issues US$500 Mllion 7-year Eurobond

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  • 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.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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