The African Export-Import Bank (Afreximbank) has closed a US$500mn five-year syndicated term loan guaranteed by the Export-Import Bank of China (China Exim).
The facility pays a margin of 110 basis points a year, and is a follow-on transaction to a US$300mn China Exim-guaranteed syndication for Afreximbank closed in September 2016. The 2016 transaction marked China Exim’s first guarantee for a non-Chinese borrower.
In both transactions, the government-owned Chinese bank, which currently holds a 6% share in Afreximbank and is represented on its board, also lent from its own balance sheet. In the 2019 deal it is providing US$75mn.
The response from the syndicated loan market was “extremely strong”, says Afreximbank, with more than 100% oversubscription achieved with the final lender group consisting of 11 institutions.
Standard Chartered acted as sole co-ordinating bank, bookrunner and mandated lead arranger. Other mandated lead arrangers were: Agricultural Bank of China, China Exim and ICBC. Arrangers were: Bank of Communications, Bank of Taiwan, China Construction Bank, First Commercial Bank, Huaxia Bank, Taiwan Cooperative Bank and the Shanghai Commercial & Savings Bank.
The proceeds of the facility will help Afreximbank reduce its cost of funds and diversify its book by geography, investor type and tenor, it says.