Africa Finance Corporation (AFC), a pan-African multilateral development finance institution and project developer, has issued a $500-million seven-year Eurobond.
The senior, unsecured Eurobond which carries a coupon of 3,875% was priced to yield 4% and matures in April 2024.
The Eurobond received strong global interest, with an order book of $2,4-billion, representing about 5 times over-subscription from 231 investors across the Middle East, Asia, the UK, Europe and the US. Prior to the launch of the bond, AFC conducted a roadshow in London, Hong Kong, Singapore, the UAE, and the US.
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%), US (25%), UJ (24%), Asia (18%) and the Middle East (4%).
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.
Banji Fehintola, director and corporate treasurer of AFC, comments: “After a successful debut Eurobond issuance in 2015, AFC has consistently engaged investors through a series of non-deal roadshows 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 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% for a five-year tenor and matures in April 2020.
Last year, AFC issued its debut senior unsecured long three-year Swiss Franc (CHF) denominated bond, raising CHF100-million, and earlier this year, issued its maiden $ 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.