Narrative
Full Description
Project narrative
On December 11, 2020, Bank of Industry Limited (BOI) signed a $1 billion syndicated loan agreement with a syndicate consisting of 28 banks, including the Export-Import Bank of China. 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. 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 lenders in the syndicate included the following financial institutions and funds: African Export-Import Bank; Credit Suisse AG (London Branch); African Finance Corporation; FirstRand Bank Limited (London Branch, acting through Rand Merchant Bank); Sumitomo Mitsui Banking Corporation; Export-Import Bank of China; Commerzbank Aktiengesellschaft (Luxemburg Branch); Eaton Vance Emerging Markets Debt Opportunities Master Fund Ltd; Eaton Vance Emerging Markets Debt Fund; KfW Ipex-Bank GmbH; Mauritius Commercial Bank; United Bank for Africa (American Branch); Access Bank (UK Branch); Atlantic Forfaitierungs AG; Arab Bank for Economic Development in Africa; Credit Europe Bank N.V.; ECOWAS Bank for Investment & Development; First City Monument Bank (UK Branch); Tunis International Bank; Union Bank UK; Eaton Vance International (Ireland Branch) Emerging Markets Debt Opportunities Fund; and Rand Merchant Bank International (Mauritius Branch). The syndicate further included the following funds associated with an unspecified financial institution, likely also Eaton Vance: "Institutional Emerging Markets Local Income Portfolio"; "Global Macro Portfolio"; "Limited Duration Income Emerging Market Debt Pocket"; "Global Opportunities Portfolio - Emerging Markets Corporate Debt Sleeve"; "Short Duration Diversified Income Global Pocket", and "MAC CIT II - GI". 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. The loan had been fully repaid by the end of the 2023 financial year.
Staff comments
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%). 5. Olaniwun Ajayi LP served as legal advisors to the borrower. G. Elias and White & Case served as legal advisors to the lenders.