Africa Finance Corporation issues US$700 million 5-year reg S Eurobond
12 June 2020
Africa Finance Corporation (“AFC” or “the Corporation”), the leading infrastructure solutions provider in Africa, today announces the successful issuance of a US$700 Million Reg S Eurobond, maturing 16 June 2025 (“the US$700 million Eurobond” or “the bond issuance”).
The US$700 million Eurobond is AFC’s first bond issuance in 2020 and carries a coupon of 3.125%. The bond received strong global interest across Europe, Asia and the Middle East despite the challenging global economic backdrop, leading it to being c.3 times over-subscribed. The order book, which reached over US$2.1 billion, comprised of high-quality fixed income investors that are seeking exposure to a high-quality investment grade issuer like AFC.
The investor base for the Eurobond reflects the geographically diverse funding opportunities for AFC. The distribution breakdown of the order book saw Asia (11%), Middle East and Africa (30%), off-shore US (4%), the United Kingdom (18%), Switzerland (16%), Germany (13%) and other Europe regions (8%) all partaking, demonstrating a keen appetite for African investment from around the world.
This bond issuance is the fifth Eurobond under the Corporation’s US$5 billion Global Medium-Term Note (“GMTN”) programme, which was recently upsized from US$3 billion in line with the Corporation’s five-year corporate strategy. AFC’s GMTN Programme is rated A3 by Moody’s Investor Services and the bond issuance which is a drawdown under the GMTN program is listed on the Irish Stock Exchange.
In strict observance of the Corporation’s COVID-19 protocol, marketing and execution was done virtually with AFC engaging with new and long-standing investors across Asia, Europe and the Middle East through a series of one-on-one calls and a global investor virtual meeting.
The Eurobond proceeds shall be used for general corporate purposes as the Corporation continues its mission to catalyze industrialization on the African continent.
Samaila Zubairu, President & CEO of AFC, commented on the announcement:
“AFC is pleased with the placement of our most recent Eurobond, which reflects market confidence in AFC’s strategy and execution and demonstrates African issuers’ ongoing access to global capital markets. The placement’s success and strong subscription rate despite the difficult global economic conditions, reflect the attractiveness of AFC as a gateway to Africa’s infrastructure and industrial opportunities for institutional capital, and will finance the value accretive beneficiation of Africa’s primary commodities as well as create jobs for Africa’s youth.”
Banji Fehintola, Senior Director & Treasurer of AFC, added: “The success of AFC’s most recent bond issuance in a very challenging and fragile macroeconomic environment attests to AFC’s strong market access, the strength of our credit and our well-established investor engagement programme. Despite recent dislocations in global markets, the successful issuance of this bond will also open the door for other African issuers to tap the bond market this year. The bond proceeds will provide AFC with additional liquidity to continue financing critical infrastructure projects across the continent, in line with our developmental mandate.”
The bond issuance was arranged by BofA Securities, J.P. Morgan and MUFG as Global Co-ordinators and Joint Bookrunners, together with First Abu Dhabi Bank and Goldman Sachs International as Joint Bookrunners