TheCable

The Bank of Industry (BoI) says it has completed a new landmark €1 billion guaranteed senior loan facility.

The bank disclosed this in a statement on Monday.

BoI said the loan would further enhance its capacity to deliver on its mandate, in line with President Muhammadu Buhari’s economic diversification agenda.

According to the bank, Africa Finance Corporation (AFC) led and coordinated the initial mandated lead arrangers (IMLAs) and underwriters for the senior phase of the transaction.

A lead arranger is an investment firm that facilitates and leads a group of investors in a syndicated loan for major financing.

Other IMLAs include Standard Chartered Bank, Absa 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; Mashreqbank PSC, Nedbank Limited, London branch; and SMBC Bank International Plc.

It added that the African Export-Import Bank (Afreximbank) acted as the agent bank.

“A syndicate of financial institutions arranged by the IMLAs has indicated strong interest in participating in the general phase of the ongoing syndication, and BOI has an option to increase the facility size up to EURO 1.5 billion after the general syndication,” the statement reads.

“The deal is unique and the first of its kind by any financial institution in Nigeria, both in terms of its size and structure.

“The transaction structure leverages the strong investment grade credit rating of AFC (rated A3 with a Stable Outlook by Moody’s) to wrap and credit-enhance BoI, thereby benefitting from favourable terms that would otherwise not be available, especially in these highly volatile markets.

“The pricing, at three months Euribor (floored at zero) + 1.65 percent per annum, is a result of this innovative structuring.”

According to the statement, this is the 5th time BoI has successfully raised funds in the international markets since 2018.

Commenting on the deal, Olukayode Pitan, managing director of BoI, said the bank was able to raise new lenders and diversify at a time when international capital markets are shut to many borrowers.

“At a time when international capital markets are shut to many borrowers, and when capital is prohibitively expensive, through this innovative transaction structure and the AFC Guarantee, BoI was not only able to raise liquidity but also able to diversify its funding sources and attract new lenders,” he said.

“The proceeds of this deal, like our previous ones, will be utilised to provide much-needed medium to long term finance to Nigerian MSMEs and large enterprises with bankable transactions at affordable Naira interest rates.”

In February, BOI raised €700 million eurobond to make funding for the growth of businesses in Nigeria.

Buhari had lauded the bank for “creating nine million jobs since 2015”. 

He also commended the bank for disbursing over N1.24 trillion to 4.2 million beneficiaries in micro, small, medium and large enterprises.