AFC is­sues $150m maiden Sukuk

East African Business Week - - FRONT PAGE -

LA­GOS, Nige­ria- - Africa Fi­nance Cor­po­ra­tion (AFC), a lead­ing pan-African mul­ti­lat­eral de­vel­op­ment fi­nance in­sti­tu­tion and project de­vel­oper, has is­sued its maiden Sukuk, the high­es­trated ever Sukuk is­suance from an African in­sti­tu­tion.

Fol­low­ing high lev­els of in­vestor in­ter­est, the ini­tial tar­get of US$100 mil­lion was more than twice over­sub­scribed, re­sult­ing in the trans­ac­tion be­ing up­sized to US$150 mil­lion and a fi­nal or­der book of ap­prox­i­mately US$230 mil­lion. In ad­di­tion to be­ing the first Sukuk trans­ac­tion of 2017, it is also the first Sukuk to be is­sued by an African supra­na­tional en­tity. The Sukuk is AFC’S sec­ond foray into Is­lamic fi­nance; the cor­po­ra­tion ac­cepted a US$50 mil­lion 15 year line of fi­nanc­ing from the Is­lamic De­vel­op­ment Bank (IDB) in 2015 to fi­nance Is­lamic Fi­nance-com­pli­ant projects lo­cated across the nu­mer­ous African IDB mem­ber coun­tries. The pri­vately placed 100% Murabaha Sukuk, which has been awarded an A3 se­nior un­se­cured rat­ing by Moody’s In­vestors Ser­vice, has a three year tenor and will ma­ture on 24 Jan­uary 2020. Emir- ates NBD Cap­i­tal, MUFG and RMB acted as Joint Bookrun­ners and Joint Lead Man­agers with Emi­rates NBD Cap­i­tal also act­ing as the Sole Global Co­or­di­na­tor. An­drew Alli, Pres­i­dent and CEO of AFC, said “The core val­ues of Is­lamic fi­nance, the need to in­vest eth­i­cally in as­sets that have a tan­gi­ble pos­i­tive so­cial im­pact, made a Sukuk is­suance a nat­u­ral choice for us. We of­fer global in­vestors the chance to be in­volved in high-im­pact in­fra­struc­ture projects that not only pro­mote so­cial and eco­nomic de­vel­op­ment across Africa but also gen­er­ate eco­nomic re­turns for our in­vestors. “This Sukuk rep­re­sents a mile­stone in our fi­nanc­ing ac­tiv­i­ties, a mile­stone that will en­able us to fur­ther di­ver­sify our fund­ing sources, to build new re­la­tion­ships with key in­vestors in in­ter­na­tional mar­kets and help us di­ver­sify our port­fo­lio of projects to con­tinue de­liv­er­ing real im­pact across the con­ti­nent.” Ahmed Al Qas­sim, CEO of Emi­rates NBD Cap­i­tal, added: “Emi­rates NBD Cap­i­tal is de­lighted to have sup­ported the in­au­gu­ral US$150 mil­lion 3 year Sukuk is­suance. The suc­cess­ful com­ple­tion of the trans­ac­tion is a tes­ta­ment to AFC’S stand­ing with the in- ter­na­tional in­vestor com­mu­nity and AFC’S com­mit­ment to de­velop new sources of fund­ing. “As the Sole Global Co­or­di­na­tor for the Sukuk, Emi­rates NBD Cap­i­tal con­tin­ues to lead the de­vel­op­ment of in­ter­na­tional Sukuk as a prod­uct and pro­vid­ing our clients with unique so­lu­tions to meet their fund­ing re­quire­ments.” AFC has a di­verse fund­ing base, with a range of fund­ing from sources across dif­fer­ent mar­kets. Last year the cor­po­ra­tion is­sued its de­but Swiss Franc de­nom­i­nated long three-year bond, rais­ing CHF 100 mil­lion, and ac­cepted a US$150 mil­lion 15 year loan fa­cil­ity from KFW De­vel­op­ment Bank. In 2015 AFC’S in­au­gu­ral 144A/reg S, US$750 mil­lion 5-year in­ter­na­tional bond was more than six times over­sub­scribed at over US$4.7 bil­lion, at­tract­ing in­sti­tu­tional in­vestors from across Asia, Europe, Mid­dle East and the United States. The Cor­po­ra­tion will cel­e­brate its 10th an­niver­sary in 2017 at the AFC Live Sum­mit, which will bring to­gether many of the top in­ter­na­tional play­ers in African in­fra­struc­ture in­vest­ment for high level dis­cus­sions on the in­dus­try’s many chal­lenges, and po­ten­tial so­lu­tions.

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