AFC issues $500 million seven-year Eurobond

Africa Finance Corporation (AFC), a leading pan-African multilateral development finance institution, and project developer, has issued a $500 million seven-year Eurobond.

The Eurobond, which carries a coupon of 3.875 per cent, was priced to yield four per cent and matures in April 2024. In his reaction, the President/CEO of AFC, Andrew Alli, said: “AFC has been committed for the last 10 years to investing in projects that drive sustainable growth and development in Africa. In that time, we have invested over US$4 billion in 28 African countries.

“Key to delivering this, are our fund-raising activities around the world, promoting the very real investment opportunities that exist in African infrastructure. The strong interest in this bond reflects investors’ confidence in AFC’s credit, strategy and risk management culture, as well as appetite for exposure to the returns available in African markets,” he said.

Also, the Director & Corporate Treasurer, AFC, Banji Fehintola, stated: “After a successful debut Eurobond issuance in 2015, AFC has consistently engaged investors through a series of non-deal road shows and other debt capital market issuances. The tremendous success of our second Eurobond issuance attests to the fact that investors continue to seek exposure to high quality, investment grade credits like AFC. This is indeed a solid endorsement of AFC’s strong business fundamentals, governance, funding strategy and risk management.”

The Eurobond received strong global interest, with an order book of US$2.4 billion, representing about five times over-subscription from 231 investors across the Middle East, Asia, the United Kingdom, Europe and the United States.

Prior to the launch of the bond, AFC conducted a road show in London, Hong Kong, Singapore, the UAE, and the United States. The bond is AFC’s second benchmark Eurobond issuance under the Corporation’s $3 billion Global Medium Term Note Programme. The bond was rated A3 by Moody’s Investor services, which is in line with AFC’s issuer rating. The bond will be listed on the Irish Stock Exchange. The Eurobond was distributed to investors in Europe (29 per cent), United States (25 per cent), United Kingdom (24 per cent), Asia (18 per cent) and the Middle East (4 per cent).

The Eurobond issue follows a solid track record of successful capital market issuances starting with AFC’s debut $750 million Eurobond issued in April 2015. The 2015 Eurobond was priced to yield 4.595 per cent for a five-year tenor and matures in April 2020.

AFC is only the second African development finance institution to issue a Eurobond with maturity longer than five years, reflecting AFC’s strong credit standing and its ability to match-fund medium to long-dated infrastructure investments.

Last year, AFC issued its debut senior unsecured long three-year Swiss Franc (CHF) denominated bond, raising CHF 100 million. Earlier this year, it issued its maiden US$150 million three year Sukuk, the highest-rated ever Sukuk issuance from an African institution, and the first Sukuk to be issued by an African supranational entity.