African Export-Import Bank (Afreximbank), has successfully closed a 1.3 billion dollar dual tenor bond issuance, its largest-ever transaction in the international debt capital markets.
The bank announced this in a statement in Cairo, Egypt on Tuesday. It said that it printed a 600 million dollar five-year note at a spread of T+185 basis points (bps) and a 700 million dollar 10-year note at a spread of T+220bps.
The bank explained that this was after achieving a final order book of 4.5 billion dollars.
It said “The Initial Pricing Thoughts (IPTS) were announced at T+220bps area and T+250bps area for the five-year and 10-year tranches, respectively.
“Backed by strong demand, the combined books peaked at five billion dollars, with a slight skew towards the five-year tranche, seeing pricing set at T+185bps to a re-offer yield of 2.634 percent and T+220bps to a re-offer yield of 3.798 percent respectively.
“The 10-year tranche was finally priced at only a five bps New Issue Premium (NIP), while the five years was priced flat to fair value.”
According to the statement, Afreximbank Advisory and Capital Markets (ACMA), acted as Sole Financial Advisors on the transaction.
Also, Afreximbank partners in arranging the transaction were Hongkong and Shangai Banking Corporation (HSBC), plc as Sole Coordinator and Joint Lead Manager/Book Runner.
It also had Mitsubishi UFJ Financial Group (MUFG), Emirates NBD Bank PJSC, Commerzbank, and Standard Chartered Bank as Joint Lead Managers and Book Runners.
It added that the transaction was a major milestone for Afreximbank, marking the second time that the bank had accessed the 144A US market and was the bank’s largest transaction in the debt capital markets to date.
The bank said it fulfilled a number of key objectives of its Liability Management strategy, which included diversification of the liability book by geography, investor type, and tenor as well as reducing the cost of funds.
The statement said prior to pricing the transaction, Afreximbank met with both new and existing investors during well-attended virtual roadshows covering Africa, Gulf countries, Europe, Asia, and the USA.
It also received overwhelmingly strong feedback, noting confidence in Afreximbank’s credit profile and strategy.
Investors also complimented the bank for helping its member countries adjust to the shocks caused by the COVID-19 pandemic, through its Pandemic Trade Impact Facility (PATIMFA), it stated.
Speaking after the closing, Denys Denya, Afreximbank’s Executive Vice President responsible for Treasury, said the landmark deal confirms continuing investor deep confidence in Afreximbank’s mission and credit story.
