China Eximbank contributes to $1 billion syndicated loan with Bank of Industry Limited for on-lending purposes

On December 11, 2020, Bank of Industry Limited (BOI) signed a $1 billion syndicated loan agreement with seven banks. There were 28 members of the lending syndicate, including Afreximbank, Credit Suisse, First Rand (Rand Merchant Bank), Sumitomo Mitsui Banking Corporation Africa Finance Corporation, and the Export-Import Bank of China. Afreximbank and Credit Suisse acted as Co-ordinating Mandated Lead Arrangers, Underwriters, and Bookrunners of the transaction. Africa Finance Corporation, First Rand (Rand Merchant Bank), and Sumitomo Mitsui Banking Corporation subsequently joined as Mandated Lead Arrangers and Bookrunners, while the Export-Import Bank of China joined as a Mandated Lead Arranger. Afreximbank acted as the Facility Agent and Security Trustee for the deal. The loan has a 12-month grace (moratorium) period on principal repayment with final maturity of 36 months from the loan signature date. Interest payable under the loan is LIBOR plus a 6% margin. The Governor of the Central Bank of Nigeria and his Committee of Governors supported BOI by providing a full guarantee for the facility (loan) and a 100% currency swap to mitigate foreign exchange rate risk. The loan will be disbursed (on-lent) in local currency (Naira) at single-digit interest rates to borrowers with bankable projects.

Additional details

1. Bank of Industry Limited (abbreviated as 'BOI') is the oldest and largest Development Finance Institution (DFI) currently operating in Nigeria. It is owned by the Ministry of Finance Incorporated (MOFI) Nigeria (94.80%), the Central Bank of Nigeria (CBN) (5.19%), and private shareholders (0.01%). Between 2015 and October 2020, BOI with the support of its various stakeholders disbursed over ₦945 billion to 3,013,087 enterprises, thus creating over 6.87 million estimated direct and indirect jobs. 2. The size of China Eximbank’s contribution is unknown. For the time being, AidData assumes equal contributions ($35,714,285) across the 28 members of the lending syndicate. 3. AidData has coded this transaction as a collateralized loan because Afreximbank served as the security trustee (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower's default under the loan. 4. AidData has estimated the all-in interest rate by adding 6% to average 6-month LIBOR in December 2020 (0.256%).

Number of official sources

2

Number of total sources

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