Leading investment-grade infrastructure solutions provider, the Africa Finance Corporation (AFC), on Thursday announced the successful issuance of its CHF200m Reg S Only four-year tenured bond priced at par is billed to mature in December 2023.
With an annual coupon of 0.5225%, the transaction has the lowest coupon ever for an African issuer in the CHF market and will allow AFC to further diversify its debt portfolio and secure financing to de-risk transformational infrastructure projects across the African continent.
The transaction, the corporation said in a statement, was priced inside its existing USD Eurobond curve and below its currently outstanding CHF bond, which matures 27 December 2019.
The new issue was preceded by an extensive non-deal roadshow in Switzerland and other parts of continental Europe, with the AFC receiving strong investor interests from several high-quality institutions, including private banks and asset managers, resulting in an oversubscription of three times.
The issuance is AFC’s second CHF bond and was rated A3 by Moody’s Investor Services, in line with AFC’s overall issuer rating. It will be listed on the Swiss Stock Exchange.
Commenting on the issuance, Samaila Zubairu, AFC’s President and chief executive expressed delight that the response to this “second Swiss Franc bond issue has been overwhelmingly positive with order books three-times oversubscribed.”
The strong appetite for AFC bonds, he continued, is a “further testimony of investor confidence in AFC’s credit story, holistic investor engagement strategy and support for our mandate to develop and fund infrastructure projects that will unlock the continent’s potential. Furthermore, the unprecedented coupon exemplifies the current reality of negative yields in Europe. Investors must look beyond to find safe yet attractive investment opportunities.”
Also speaking on the bond, Banji Fehintola, Senior Director and Treasurer of AFC, expressed pleasure at “the results of our second Swiss bond issue. With an annual coupon of 0.5225%, which is substantially lower than our inaugural CHF bond with an annual coupon of 0.85%, it is a landmark for AFC, Africa, and supranational institutions. This new bond will provide us with liquidity to refinance our maturing CHF bond and fund the Corporation’s balance sheet growth. We look forward to deepening our relationship with Swiss investors and frequenting more often this very important market.”
Credit Suisse and Renaissance Capital acted as Joint Lead Managers and Bookrunners.