The Africa Finance Corporation (AFC), a leading pan-African multilateral development finance institution and project developer, has issued its debut senior unsecured Swiss Franc (CHF) denominated bond, raising CHF 100 million with a tenor of 3 years and 150 days. The bond which pays an annual coupon of 0.85% has a settlement date of 27 July 2016 and maturity date of 27 December 2019.
UBS Investment Bank and Deutsche Bank AG London Branch, acting through Deutsche Bank AG Zurich Branch were Joint Lead Managers on the transaction while J.P. Morgan Securities PLC and MUFG Securities EMEA plc were hedging banks.
The bond was issued following a non-deal roadshow in Geneva and Zurich held in June 2016. The bond issuance enables AFC to further diversify its funding sources and will provide additional long-term liquidity to support the Corporation’s investment activities. The proceeds of this bond issue will be used to fund vital infrastructure projects across the African continent.
Andrew Alli, President and CEO of AFC, said: “Through our experience as both a financier and project developer, AFC has over the years demonstrated its ability to deliver essential infrastructure projects in Africa that will help grow African economies. We are very proud to issue our debut CHF bond as this enables us to tap a new and very important investor base as we diversify our funding sources. AFC continues to promote the real opportunities in African infrastructure around the world.
“At a time of heightened international volatility, AFC continues to provide opportunities to invest in African infrastructure to investors around the world. The successful issuance of this bond demonstrates continued investor confidence in AFC and our ability to deliver for our investors and for African economies.”
Ade Adebajo, Executive Director at UBS in London further commented: “We are very pleased to help AFC establish this debut CHF bond issue. We view this transaction as a further step in AFC’s strategy, to diversify its funding base across multiple currencies and investors, from time to time.”
Henrik Johnsson, MD and Head of EMEA Debt Syndicate at Deutsche Bank, added: “we believe that AFC’s bold and successful entry into the CHF market will pave the way for other new market entrants as investors continue to diversify their holdings”.
To date the Corporation has invested US$3.2 billion in projects across 25 African countries and in a wide range of sectors including power, telecommunications, transport and logistics, natural resources, and heavy industries.
In June 2016, the AFC was awarded an A3/P-2 , investment grade credit rating with a stable outlook by international ratings agency Moody’s for a third consecutive year.
AFC, an international investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector infrastructure investment across Africa. With a current balance sheet size of approximately US$3.2 billion, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. In May 2015, AFC successfully concluded a debut US$750 million Eurobond issue which was 7 times oversubscribed and attracted investors from Asia, Europe and the USA.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.
AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. The Natural resources sector is an important focus area for AFC. The Corporation is developing a rapidly expanding franchise in Sub Saharan-Africa, with a number of landmark transactions approved and executed. The Corporation has total investment in the natural resources sector of over US$450 million, and mobilized over US$2 billion of funding as a sponsor, adviser or lender for natural resources projects across the continent.