The Bank of Industry, Nigeria’s leading development financial institution has successfully raised a €1 billion syndicated loan facility to provide the much-needed medium to long-term finance to Nigerian MSMEs and Large Enterprises.
This loan facility, organized by Africa Finance Corp., Standard Chartered Bank, and other lead arrangers, will strengthen BoI’s capacity to achieve its institutional mandate, according to the Nigerian lender.
The Managing Director of the bank, Mr. Kayode Pitan, commented on the bank’s ability to access funds in the international market, stating that the conclusion of this transaction will bring the total funds raised by the institution to an excess of $5 Billion, from 2018 to date. He said:
“At a time when international capital markets are shut to many borrowers, and when capital is prohibitively expensive, through this innovative transaction structure and the AFC Guarantee, BOI was not only able to raise liquidity but also able to diversify its funding sources and attract new lenders.”
What BoI is Saying
“A syndicate of financial institutions arranged by the IMLAs has indicated strong interest in participating in the general phase of the ongoing syndication, and BOI has an option to increase the facility size up to EURO 1.5 billion after the general syndication.”
“The deal is unique and the first of its kind by any financial institution in Nigeria both in terms of its size and structure.”
“The transaction structure leverages the strong investment grade credit rating of AFC (rated A3 with a Stable Outlook by Moody’s) to wrap and credit-enhance BoI thereby benefiting from favorable terms that would otherwise not be available, especially in these highly volatile markets.”
“The pricing, at 3 months Euribor (floored at zero) + 1.65% per annum, is a result of this innovative structuring.”
What you need to know
The Bank of Industry has disbursed over N1.2 Trillion to 4,205,920 MSMEs, thereby creating over 9,048,444 million estimated direct and indirect jobs between 2015 and 2021, with the support of its various stakeholders.
The Governor of the Central Bank of Nigeria and the CBN Committee of Governors supported BoI by providing a full guarantee to facilitate the AFC guarantee and a 100% currency swap to mitigate the foreign exchange rate risk.