Leading pan-African multilateral development finance institution and project developer, Africa Finance Corporation, on Tuesday issued a US$500 million 7-year senior, unsecured Eurobond with a coupon of 3.875%, which was priced to yield 4.000%.
The Eurobond, which matures in April 2024 received strong global interest, with an order book of US$2.4bn, represents about five times over-subscription from 231 investors across the Middle East, Asia, the United Kingdom, Europe and the United States.
Ahead of the launch of the bond, AFC’s second benchmark Eurobond issuance under the Corporation’s US$3 billion Global Medium Term Note Programme, the corporation conducted a roadshow in London, Hong Kong, Singapore, the UAE, and the United States.
Citi, J.P. Morgan, MUFG and Standard Chartered Bank acted as Joint Lead Managers and Book-runners for the U.S. Dollar-denominated Rule144A/Reg. S issue, 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 the second African development finance institution to issue a Eurobond with maturity longer than five years, reflecting its strong credit standing and ability to match-fund medium to long-dated infrastructure investments.
According to Andrew All, the corporation’s chief executive, “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.”
Also commenting on the issue, Banji Fehintola, Director & Corporate Treasurer of AFC recalled that after its “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.”
The Eurobond issue follows a solid track record of successful capital market issuances starting with AFC’s debut US$750m Eurobond issued in April 2015 priced to yield 4.595% for a five-year tenor and matures in April 2020.
Last year, AFC issued its debut senior unsecured long three-year Swiss Franc (CHF) denominated bond, raising CHF 100 million, and earlier this year, issued its maiden US$150m three year Sukuk, the highest-rated ever Sukuk issuance from an African institution and the first Sukuk to be issued by an African supranational entity.
Meanwhile, between May 15 and 16, 2017, the corporation will celebrate its 10th anniversary at the Africa’s premier infrastructure summit, that brings together top international players in African infrastructure investment for high-level discussions on the industry’s many challenges, and potential solutions.
