• Thursday, April 18, 2024
businessday logo

BusinessDay

AFC closes $1.16bn syndicated loan for Africa’s infrastructure

AFC closes $1.16bn syndicated loan for Africa’s infrastructure

Africa Finance Corporation (AFC), an infrastructure solutions provider in Africa, has announced the closing of a $1.16 billion syndicated loan, attracting new lenders from the Middle East, Europe, and Asia.

The transaction of closing the syndicated loan which was held in Dubai is its largest-ever debt facility and a milestone in developing critical infrastructure projects across the continent by enhancing its financial flexibility and diversifying its investor base

Read also: Africa Finance Corporation secures $625m syndicated loan

“The global loan market’s overwhelming interest in Africa’s growth story is evident in the large pool of lenders that supported this syndication, making it AFC’s largest ever,” said Samaila Zubairu, president/CEO at AFC.

“This is a significant endorsement of our commitment to ensure that infrastructure projects support local processing and value capture, thereby providing the much-needed impetus to African industrialisation, enhanced export earnings, and job creation,” he said.

Initially launched at $1 billion, the three-year syndicated loan was upsized after being oversubscribed by 49 percent, underscoring global investor confidence in AFC’s track record, creditworthiness, and ability to navigate the current economic landscape marked by evolving global complexities.

The firm said proceeds from the loan will be deployed to advance AFC’s mission to consistently deliver fast and sustainable solutions to close Africa’s infrastructure gap and unleash the continent’s potential, leading to prosperity for all Africans.

It stated that AFC’s position as the pre-eminent partner of choice between African and global stakeholders and investors for mutually beneficial outcomes reflects the corporation’s relentless dedication to shaping a brighter and prosperous tomorrow for Africa and Africans.

“Financial institutions including Société Générale, Bank Muscat, and Intesa Sanpolo Bank Luxembourg S.A. joined the syndicate as first-time lenders, showcasing AFC’s ability to build a global coalition of investors confident in the Corporation’s strong fundamentals as one of the highest investment-grade institutions in Africa.

On the back of its A3 credit rating by Moody’s, AFC said it made strides in diversifying its funding sources in recent years.

It noted that in 2023, the corporation orchestrated a $625 million syndicated loan, its second largest, with lenders predominantly from the Middle East and Asia.

“AFC also secured a $350 million long-term line of credit from the African Development Bank (AfDB) and a EUR50 million loan facility agreement with the Italian development finance institution, Cassa Depositi e Prestiti SpA (CDP).

“Both agreements were signed on the sidelines of COP28 in Dubai. Additionally, the C-corporation received $400 million from the Exim Bank of China,” AFC stated adding that it is distributed by APO Group on behalf of Africa Finance Corporation.