Africa Finance Corporation issues US$650 million seven-year Eurobond and concludes tender offer on its US$750 million 4.375% 2020 144a/regs notes

13 June 2019

Africa Finance Corporation (“AFC” or “the Corporation”), the leading infrastructure solutions provider in Africa, announces the successful issuance of a US$650 million Eurobond for general corporate purposes, maturing in April 2026. The Corporation also concluded an Any-and-All Tender for AFC’s US$750 million Notes due in 2020.

The Senior, unsecured Eurobond which carries a coupon of 4.375% was priced to yield 4.500% and received strong global interest across the Middle East, Asia, the United Kingdom, Europe and the United States. Prior to the launch of the bond, AFC conducted a roadshow in London, Hong Kong, Singapore, the UAE and United States.

The bond is AFC’s third benchmark Eurobond issuance under the Corporation’s US$3 billion Global Medium Term Note Programme. The bond was rated A3 by Moody’s Investor Services, in line with AFC’s issuer rating. It is listed on the Irish Stock Exchange and was distributed to investors in Europe (29%), United Kingdom (21%), United States (20%), Asia (16%) and the Middle East (1%).

AFC launched a Tender Offer targeting Any and All of its US$750 million 4.375% 2020 RegS/144A Notes while simultaneously announcing a global roadshow for the Bond. The tender offer, which had the objective of proactively managing AFC’s overall debt redemptions and to extend its debt maturity profile, was priced at 101.75%. The aggregate principal amount tendered was US$375.48 million which is c. 50% of the notes. The Notes acquired in the Tender Offer will be cancelled.

Samaila Zubairu, President & CEO of AFC, commented on the announcement: “AFC is pleased with the successful placement of its third Eurobond, which enjoyed a strong subscription rate across multiple geographies. The level of appetite for this bond is a true testament to the growing confidence that global capital markets are placing on Africa’s investment potential, especially in infrastructure, as well as the capital markets’ confidence that AFC is the partner for institutional capital to access long-term real assets that improve the productivity and growth of African communities.”

Banji Fehintola, Senior Director & Head of Treasury & Financial Institutions of AFC, added: “The interest in AFC’s latest Eurobond was overwhelmingly positive, with significant interest seen from several high-quality investors from across the globe. The successful liability management exercise that we also carried out on our Eurobond maturing in April 2020 enabled AFC to extend the maturity profile of its debt while giving our investors an opportunity to keep their exposure to a high-quality investment grade credit, like AFC. Overall, we are very pleased with the outcome of the bond issue, which has so far been one of the most competitively priced bond issue from Africa this year.”

The Eurobond issue follows a solid track record of successful capital market issuances starting in 2015 with AFC’s US$750 million five-year Eurobond and followed in 2016 by CHF 100 million raised via a senior unsecured long three-year bond. In 2017, AFC issued a US$150 million three-year Sukuk, which was the highest-rated-ever Sukuk issuance from an African institution and the first Sukuk to be issued by an African supranational entity, as well as a US$500 million seven-year Eurobond.

MUFG, J.P. Morgan, Merrill Lynch International, First Abu Dhabi Bank PJSC and Rand Merchant Bank acted as Joint Lead Managers and Bookrunners for the U.S.-dollar-denominated Rule144A/Reg. S issue and as Dealer Managers for the Tender Offer.

About AFC – www.africafc.org

AFC, an investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector-led infrastructure investment across Africa. With a current balance sheet size of approximately US$4.2 billion, AFC is the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. AFC successfully raised US$750 million in 2015 and US$500 million in 2017; out of its Board-approved US$3 Billion Global Medium-Term Note (MTN) Programme. Both Eurobond issues were oversubscribed and attracted investors from Asia, Europe and the USA.

AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth. AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the Corporation has invested approximately US$4 billion in projects within 28 countries across North, East, West and Southern Africa.