African Export-Import Bank (Afreximbank) has announced it successfully closed a US$1.3 billion dual tenor bond issuance, the Bank’s largest-ever transaction in the international debt capital markets.
Afreximbank printed a US$600 million 5-year note at a spread of T+185bps and a US$700 million 10-year note at a spread of T+220bps, after achieving a final order book of US$4.5 billion.
The Initial Pricing Thoughts (IPTS) were announced at T+220bps area and T+250bps area for the 5-year and 10-year tranches, respectively. Backed by strong demand, the combined books peaked at US$5 billion, with a slight skew towards the 5-year tranche, seeing pricing set at T+185 bps to a re-offer yield of 2.634% and T+220bps to a re-offer yield of 3.798%, respectively. The 10-year tranche was finally priced at only a 5bps New Issue Premium (NIP), while the 5 year was priced flat to fair value.
Afreximbank Advisory and Capital Markets (ACMA) acted as Sole Financial Advisors on the transaction, while Afreximbank partners in arranging the transaction were HSBC Bank plc as Sole Coordinator and Joint Lead Manager/Book Runner as well as MUFG, Emirates NBD Bank PJSC, Commerzbank and Standard Chartered Bank as Joint Lead Managers and Book Runners.
The transaction is a major milestone for Afreximbank, marking the second time that the Bank has accessed the 144A US market and is the Bank’s largest transaction in the debt capital markets to date. It fulfils a number of key objectives of the Bank’s Liability Management strategy, which include diversification of the liability book by geography, investor type and tenor as well as reducing cost of funds.
Speaking after the closing, Mr Denys Denya, Afreximbank’s Executive Vice President responsible for Treasury, said: “This landmark deal confirms continuing investor deep confidence in Afreximbank’s mission and credit story, and achieving competitive pricing for both tranches is testament to the strength of support from investors from all key financial markets across the global. Importantly, the success of this transaction enables the Bank to continue to play a major role in the development of intra-African trade as well as trade between Africa and the rest of the world.
Prior to pricing the transaction, Afreximbank met with both new and existing investors during well-attended virtual roadshows covering the Africa, Gulf countries, Europe, Asia and USA. The Bank received overwhelmingly strong feedback, noting confidence in Afreximbank’s credit profile and strategy. Investors also complimented the Bank in helping its member countries adjust to the shocks caused by the COVID-19 pandemic, through its Pandemic Trade Impact Facility (PATIMFA).