…With an order book exceeding US$1.2 billion, the bond drew high-quality investors seeking exposure to investment-grade issuers like AFC
WED OCT 02 2024-theGBJournal| Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, today announced an outstanding return to the global debt capital markets, successfully issuing a US$500 million 144A/Reg S Eurobond.
The benchmark five-year Note, issued at par with a coupon of 5.55%, had a negative concession with pricing inside the Corporation’s outstanding yield curve, resulting in the tightest T-spread ever achieved by AFC on a 5-year US dollar benchmark and enabling AFC to broadly reset its yield curve in the secondary market.
The issuance generated significant interest across Europe, Asia, United States, and the Middle East, resulting in a peak book that was over two and a half times oversubscribed.
“After about three years of absence from the Eurobond market, we are proud of the overwhelmingly positive reception for this bond issuance, which underscores the global capital market’s continued confidence in AFC’s credit story, our holistic investor engagement strategy and support for our mandate to develop and finance infrastructure projects that will enable Africa’s sustainable industrialization and prosperity,” said Samaila Zubairu, President & CEO of AFC.
“The significant oversubscription and success of this bond issue is an endorsement of our impressive financial performance, business strategy, conservative financial policies and our impact in leading transformative change in Africa.”
With an order book exceeding US$1.2 billion, the bond drew high-quality investors seeking exposure to investment-grade issuers like AFC. The Corporation’s consistent A3 credit rating, upheld since 2014 and recently reaffirmed by Moody’s, with a rating outlook change from Negative to Stable, further boosted the bond’s appeal among institutional investors. The breakdown of the order book reflected AFC’s very strong capital market access, with final allocation of Europe: 57%; North America: 23%; Middle East: 15%; and Asia: 5%.
The Eurobond was issued under AFC’s $5 billion Global Medium-Term Note (GMTN) programme. The proceeds from the bond, listed on the Euronext Dublin and the London Stock Exchange, will support AFC’s mission to drive rapid industrialisation and accelerate development impact across Africa.
Banji Fehintola, Executive Board Member and Head of Financial Services, commented: “The success of this bond signals more than just strong market access for AFC; it represents a gateway for other African issuers to follow suit. Despite market volatility, our ability to secure this level of demand affirms the resilience of AFC’s credit profile and opens new doors for Africa’s infrastructure financing.”
The issuance was coordinated by a consortium of global financial institutions, including BofA Securities, Citigroup, First Abu Dhabi Bank, and Goldman Sachs International as Global Coordinators and Joint Bookrunners, alongside Rand Merchant Bank and SMBC Nikko as Joint Bookrunners.
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