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MSMEs | MSME - Funding, Lending & Credit

BOI Concludes US$1bn Syndicated Term Loan in the International Market

Dec 31, 2020   •   by   •   Source: Proshare   •   eye-icon 3473 views

Thursday, December31, 2020 / 7:53 AM / by Bank of Industry / Header ImageCredit: Punch


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In line with the focus of President Muhammadu Buhari'sadministration to revitalise Nigeria's Industrial sector and create 10 millionjobs by leveraging the Nigeria Industrial Revolution Plan and the EconomicRecovery and Growth Plan, the Bank of Industry (BOI) has just successfullyconcluded a landmark US1bn loan syndication transaction. The transaction isaimed at further improving the capacity of the bank to continue to effectivelysupport Micro, Small, Medium and Large enterprises (across key sectors) of theNigerian economy with affordable loans of medium to long-term, alongsidemoratorium benefits.

 

This transaction marksthe third major international debt syndication deal successfully concluded byBOI within the last 3 years. In 2018, the bank raised the sum of US$750 million(Arranged by African Export-Import Bank "Afreximbank") which has been fullyrepaid, and in March this year, concluded a US$1 billion loan deal (Lead arrangedby Afreximbank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui BankingCorporation Europe Limited (SMBC).

Afreximbank and Credit Suisse acted asCo-ordinating Mandated Lead Arrangers, Underwriters, and Bookrunners of thetransaction. Africa Finance Corporation, First Rand (Rand Merchant Bank) andSumitomo Mitsui Banking Corporation subsequently joined as Mandated LeadArrangers and Bookrunners, while the Export-Import Bank of China joined as aMandated Lead Arranger. Afreximbank acted as the Facility Agent and SecurityTrustee for the deal. We are pleased to report that 28 international financialinstitutions and funds participated in this transaction, which was initiallylaunched at US$750m, but upsized to US$1bn due to over-subscription.

Key factors that led to the success ofthis deal despite the challenges presented by the COVID-19 pandemic includeamongst others, the impressive credit ratings of the bank (long term issuerdefault rating of B with stable outlook from Fitch, long term issuer rating ofB2 from Moody's and Aa from Agusto), its ISO certifications in both QualityManagement Systems and Information Security, as well as the strong strategicpartnership that the bank has developed with the Nigerian commercial banks, whopatriotically continue to provide credit enhancements and de-risking tools toBOI customers.

Of particular and special note is thesupport of our owners (the Federal Ministry of Finance Incorporated and theCentral Bank of Nigeria), the Federal Ministry of Finance, Budget and NationalPlanning and our supervising ministry, the Federal Ministry of Industry, Tradeand Investment. The Governor of the Central Bank of Nigeria and his Committeeof Governors supported BOI by providing a full guarantee for the facility and a100% currency swap to mitigate the foreign exchange rate risk.

The facility will be disbursed in Nairaat single digit interest rates to borrowers with bankable projects. Between2015 and October 2020, the Bank of Industry with the support of its variousstakeholders disbursed over ?óÔÇÜ?ª945 billion to 3,013,087 enterprises, thus creatingover 6.87 million estimated direct and indirect jobs.

With the successful conclusion of thisdeal, the Board and management of Bank of Industry is confident that the bankis now better positioned to catalyze domestic production and facilitate jobcreation on a transformational scale, enhance local industry competitiveness,attract domestic and foreign investments, integrate our local industries intodomestic, regional and global value chains, grow our export earnings andpositively impact the overall economic development of Nigeria in line with itsmandate and especially in light of the planned commencement of the AfricanContinental Free Trade Agreement (AfCFTA) in January 2021.


Proshare Nigeria Pvt. Ltd.


 

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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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