Bank of Industry completes landmark new €1 billion deal
The Bank of Industry (BoI) has announced the conclusion of a landmark €1 billion senior secured loan facility to further strengthen its ability to deliver on its mandate, in line with President Muhammadu Buhari’s economic diversification agenda.
According to the bank, the mandated lead arrangers (IMLA) and initial underwriters for the senior phase of the transaction, led and coordinated by Africa Finance Corporation (AFC) and Standard Chartered Bank, include Abso Bank Limited (acting through its Corporate and Investment Banking division); First Abu Dhabi Bank PJSC; FirstRand Bank Limited (London Branch), acting through its Rand Merchant Bank division; Moshreqbonk PSC, Nedbank Limited, London Branch; and SMBC Bank International Plc.
The African Export-Import Bank (Afreximbank) is the Agent Bank.
“A syndicate of financial institutions organized by IMLA has expressed strong interest in participating in the general phase of the syndication underway, and BOI has the option to increase the size of the facility up to 1.5 billion euros after general syndication,” the bank said.
“The deal is quite unique and the first of its kind by a financial institution in Nigeria, both in terms of size and structure.
“The structure of the transaction leverages AFC’s strong investment grade credit rating (rated A3 with a stable outlook by Moody’s) to wrap and enhance BoI credit, thereby benefiting from favorable terms that would not otherwise be not available, especially in these highly volatile markets.
“The pricing, at 3 months Euribor (floored at zero) + 1.65% per year, is the result of this innovative structuring.
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Commenting on the deal, the bank’s managing director, Kayode Pitan, said: “At a time when international financial markets are closed to many borrowers and capital is prohibitively expensive, thanks to this transaction structure innovative and AFC-guaranteed, BOI was not only able to raise cash but also to diversify its funding sources and attract new lenders.
This is the fifth time that BOI has successfully raised funds in international markets since 2018. With the closing of this transaction, the total funds raised by the bank from 2018 to date exceeds $5 billion.
“The proceeds of this agreement, as in our previous ones, will be used to provide much-needed medium to long-term financing to Nigerian MSMEs and large corporates with bankable transactions at affordable Naira interest rates,” Pitan said.
Between 2015 and 2021, the Bank of Industry, with the support of its various stakeholders, has disbursed over N1.2 trillion to 4,205,920 businesses, creating over 9,048,444 million direct jobs and estimated indirect.
“The Board of Directors, Management and all staff of the Bank would like to express their deep appreciation for the unwavering support of our majority shareholders – the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria (CBN). We also express our deep gratitude to the Federal Ministry of Finance, Budget and National Planning and our parent ministry, the Federal Ministry of Industry, Trade and Investment. The Governor of the Central Bank of Nigeria and the CBN Board of Governors have supported the BoI by providing full collateral to facilitate the AFC guarantee and 100% currency swap to mitigate currency risk,” the statement read.