Afreximbank issues $500m bond to strengthen banking operations

The African Export-import Bank says it has issued a $500 million (N75 billion) bond as part of an equity raising effort to further strengthen its banking operations.
In a statement on Friday in Lagos, the bank said that the bond, listed on the Irish Stock Market, would mature on June 4, 2018.
It said that the bond, issued at a coupon rate of 3.875 per cent per annum, had enjoyed strong investor support.
According to the bank, headquartered in Cairo, Egypt, the bond has generated significant orders that saw the books grew in excess of 1.2 billion dollars (N180 billion) on the opening day.
Jean-Louis Ekra, the President of Afreximbank said: “We are very excited at the success of this issuance.
“The extremely high interest in our bond, which resulted in the book reaching well beyond 1.2 billion dollars, reflects the continuing confidence which the international investment community has in Afreximbank.
“The proceeds of this exercise will enable the bank to meet its goal of delivering even effective trade financing services to our customers.”
It said that the bond was the third by Afreximbank in the international debt capital market.
The bank said: “The first bond of 300 million dollars (more than N45 billion) was issued in 2009 and a second for 500 million dollars in 2011.
“HSBC, Commerzbank, Mitsubishi UFJ Securities and Standard Bank are joint book-runners and joint lead managers for the bond.”
It would be recalled that in December, 2012, Afreximbank’s shareholders approved a change in the bank’s Charter to increase its authorised capital from $750 million to $5 billion.
The move was to give the bank a more robust foundation to execute its mandate of financing and promoting African trade.
The African Export Import Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors to finance and promote intra- and extra-African trade.
Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organisation, and the Charter, which governs its corporate structure and operations.
Afreximbank is rated Baa2 by Moody’s and BBB- by both the S&P and the Fitch rating agencies.