…142.5% subscription shows investors’ confidence in BOI, Nigerian economy – Olusi
The Bank of Industry (BOI) has successfully raised a landmark €1.425 billion from the senior phase of its global loan syndication, giving it a substantial firepower to boost financing for Nigeria’s businesses.
The deal which received a 42.5% oversubscription from international financial markets not only marks the largest in the bank’s history, but further cements its position as a key player in financing Nigeria’s industrial and private sectors.
Before now, the largest loan syndications the bank ever did were €1bn in 2020 and 2022 respectively, and successfully repaid in July 2024.
Olasupo Olusi, the managing director and chief executive officer of BOI, told BusinessDay that the latest loan syndication shows a significant vote of confidence from foreign investors in both the BoI and Nigeria’s economic prospects.
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He added that the facility is composed of both fully and partially guaranteed tranches by the Africa Finance Corporation, underscoring the strength of partnerships which the BOI has built with leading global financial institutions.
A syndicated loan is a form of financing that is offered by a group of lenders. Such arises when a project requires too large a loan for a single lender or when a project needs a specialised lender with expertise in a specific asset class.
According to Olusi, the successful repayment of the previous one in July further enhanced investor confidence, contributing to the oversubscription of the latest loan.
In the latest deal, members of the syndicate comprise over 30 financial institutions, Development financial institutions (DFIs), Export credit Agencies (ECAs), and multilateral institutions from across the globe including Europe, Middle East, Far East and Africa.
BusinessDay understands, that the lenders include the Global Co-ordinations – Africa Finance Corporation and Standard Chartered Bank; The Facility Agent – Africa Export Import Bank, other Initial Mandated Lead Arrangers and Bookrunners, as well as several other financial institutions spread across Africa, Europe and the Middle East.
While expressing excitement about the achievement, Olusi highlighted that the syndicated loan will be instrumental in meeting the growing demand for low-interest, long-term financing for Nigeria’s private sector.
“This is a significant milestone in the bank’s history and in its drive to keep achieving its mandate to drive sustainable industrialization in Nigeria,” he said.
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“This transaction was launched at €1bn with an accordion of up to €1bn. The result being discussed today is the outcome of the senior phase, which was over-subscribed by 42.5%. The general phase is on-going as we speak and we are optimistic of a very favourable outcome upon its close.
“The deal will enhance the ability of the bank to keep providing affordable and patient capital, with market-friendly terms to Nigeria’s real sector by further strengthening its balance sheet, whose size stood at N3.9 Trillion as at the year-ended end of 2023.”
The Managing Director credited the success of the transaction to the unwavering dedication of the bank’s management team, aligning with President Bola Ahmed Tinubu’s vision to expand economic opportunities for businesses across the country.
“This is the largest syndication in the Bank’s history and is testament to the hard work and dedication of the management of Bol to ensure that much needed low Interest and longer tenured funds are available to Nigeria’s growing private sector in line with the vision of His Excellency President Bola Ahmed Tinubu. We are grateful for the support received from the CBN and other agencies of government,” Olusi said.
He also acknowledged the support from the Central Bank of Nigeria and other government agencies in facilitating the bank’s success.
He explained that the proceeds from the loan will provide much-needed financing for businesses across various sectors, contributing to the nation’s economic growth as BOI is keen on continuing its collaboration with global development financial institutions to ensure better loan terms for Nigerian enterprises.
Africa Finance Corporation and Standard Chartered Bank acted as the Global Coordinators of this €1 billion syndicated term loan facility, with accordion of another €1 billion.
The facility saw active participation from prestigious financial institutions, including the African Export-Import Bank, First Abu Dhabi Bank, Mashreqbank psc, FirstRand Bank (London Branch), SMBC Bank, and Standard Chartered Bank, among others.
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Olusi added that the transaction was at a competitive rate, benchmarked against the Secured Overnight Financing Rate (SOFR), plus a margin.
“This enables the bank to keep extending credit to Nigeria’s real sector at very competitive rates.”
With BOI hopeful of a successful conclusion of the ongoing general phase of the syndication, the CEO noted that the bank anticipates strong interest from both local and international investors, highlighting its growing influence in the global financial landscape.
