Ghana’s GCB Bank has raised a US$117mn syndicated trade finance facility from a group of eight lenders.

The facility, disbursed in early February, was oversubscribed by more than double its initial launch amount of US$50mn.

London-based alternative trade finance, Africa Trade Finance, is the bookrunner and co-ordinator of the facility, while First Abu Dhabi Bank serves as agent.

Rima Kalai, an executive director at Africa Trade Finance, tells GTR the pool of lenders is largely composed of banks based in the UK, Switzerland, North Africa, South Africa, the Gulf Cooperation Council region, and the US.

The proceeds are expected to support the trade of various goods, including soft commodities, metals, energy, as well as machinery and equipment.

The deal has a tenor of six months but contains a rollover option to extend further. Dentons and Bentsi-Enchill Letsa & Ankomah are acting as legal counsels on the transaction.

Speaking to GTR, Christian Karam, director of Africa Trade Finance, says the commitments are a result of the borrower’s strong liquidity and its position in a sector where major financial institutions remain a “good and safe risk”.

He says overall market sentiment remains subdued in Ghana, with country limits having been reduced following the ratings downgrade of the Ghanaian sovereign, a change which also affects commercial banks.

“The deal comes at a time when Ghana is experiencing a tight credit stance reflecting the emerging challenging operating environment including the general slump in economic activity from the impact of the pandemic, measures to contain the virus, resultant temporary closures, and anticipated loan repayment challenges,” he adds.

Last week, ratings agency Moody’s announced it was downgrading Ghana from B3 to CAA1, citing the “increasingly difficult task government faces in addressing the intertwined liquidity and debt challenges”.

Africa Trade Finance has previously extended support to another commercial lender in Ghana, CalBank.

As reported by GTR in August 2019, Africa Trade Finance served as sole co-ordinator and bookrunner on a deal which saw CalBank secure US$100mn from a group of 14 lenders. Karam said the move was significant at the time, as commercial lenders had historically turned to development finance institutions or bilateral bank relationships to secure trade finance funding.

According to Africa Trade Finance, CalBank recently signed its syndicated trade finance facility for the fourth consecutive year, in an oversubscribed US$128mn deal which was disbursed in November.