Nigeria backed Africa Finance Corporation (AFC) has announced the issuance of a maiden $20 million, one-year note to a Thai institutional investor (the investor) under the Corporation’s Global Medium Term Notes (GMTN) Program.
AFC was approached by Standard Chartered Bank (SCB) regarding the investor, which had expressed an interest in purchasing a note under the GMTN program.
Following several discussions, the pricing of the note and terms of the transaction were agreed between AFC, SCB and the investor.
AFC will issue a one-year fixed interest rate note to the investor, and immediately then enter into an interest rate swap agreement with SCB to change the Corporation’s fixed interest rate obligation under the note into a floating interest rate.
AFC established the $3 billion GMTN program in April 2015 and issued its debut $750 million, five-year Eurobond under it.
Banji Fehintola, Senior Vice President and Treasurer of AFC, commented on the announcement: “As AFC’s maiden note issued under its GMTN program, this transaction not only strengthens the financial position from which AFC can continue to drive investment and growth across Africa, but also demonstrates investor confidence in the AFC, from geographies as far reaching as Southeast Asia”.
AFC, an international investment grade multilateral finance institution, was established in 2007 with a capital base of US$1 billion, to be the catalyst for private sector infrastructure investment across Africa. With a current capital base of US$2.9 billion, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service.
In May 2015, AFC successfully concluded a debut US$750 million Eurobond issue which was 7 times oversubscribed and attracted investors from Asia, Europe and the USA.