SAT, JAN 13 2024-theGBJournal|African Export-Import Bank (Afreximbank) announced on Friday that it has made an initial disbursement of US$2.25 billion has been made.
It said a second tranche of US$1.05 billion is expected to be disbursed subsequently.
Afreximbank arranged the syndicated US$3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL)in 2023.
The landmark financing is Nigeria’s largest crude oil prepayment facility and one of the largest syndicated loans raised in Africa in 2023.
The 5-year facility carries a margin of 6.0% per annum above the 3-month secured overnight financing rate (SOFR).
The transaction structure has an embedded price balance mechanism where 90% of all excess cash from the sale of the committed barrels (after debt service) will be released while the balance of 10% will be used to prepay the facility, effectively shortening the final maturity of the facility and freeing cashflow from future pledged cargoes for use by Nigeria.
The initial participating lenders are Afreximbank, Africa’s multilateral trade finance institution, Gunvor International BV, a Geneva-based multinational energy and commodities trading company and Sahara Energy Resources Limited, an African-owned, leading international energy and infrastructure conglomerate.
”The disbursement of the initial US$ 2.25 billion under the facility will support Nigeria’s long-term economic stability, ease access to import financing for raw materials and essential goods, support Industrialization and trade development efforts. We are pleased that despite the typical year-end encumbrances, our partners and investors rallied and raised the funds required in record time. We thank them for their support,” Afreximbank President and Chairman of the Board of Directors, Prof. Benedict Oramah said.
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