The Bank of Industry, BoI, has successfully closed a $1 billion loan syndication deal to boost its capacity to effectively support micro, small, medium and large enterprises across key sectors of the Nigerian economy, with affordable medium to long-term loans.
In a statement, the bank said 28 international financial institutions and funds participated in the transaction that was earlier put at $750 million, but later increased to US$1 billion due to over-subscription, adding that that the loan will be disbursed in Naira at single digit interest rates to successful borrowers with approved bankable projects.
The transaction marks the third major international debt syndication deal successfully concluded by BoI within the last three years. Recall that in 2018, the bank raised the sum of $750 million which has been fully repaid.
“Key factors that led to the success of this deal despite the challenges presented by the COVID-19 pandemic include among others, the impressive credit ratings of the bank (long term issuer default rating of B with stable outlook from Fitch, long term issuer rating of B2 from Moody’s and AA from Agusto) and its ISO certifications in both Quality Management Systems and Information Security, as well as the strong strategic partnership that the bank has developed with the Nigerian commercial banks, which patriotically continue to provide credit enhancements and de-risking tools to BoI customers ” the statement read.
Managing Director/Chief Executive Officer, BOI, Olukayode Pitan
According to BOI, Afreximbank and Credit Suisse acted as coordinating mandated lead arrangers, underwriters, and book runners of the transaction while Africa Finance Corporation, AFC, First Rand (Rand Merchant Bank) and Sumitomo Mitsui Banking Corporation subsequently joined as mandated lead arrangers and book runners, alongside the Export-Import Bank of China that joined as a mandated lead arranger.
The Governor of the Central Bank of Nigeria, Godwin Emefiele, and his Committee of Governors supported BoI by providing a full guarantee for the facility and a 100 percent currency swap to mitigate the foreign exchange rate risk. “Of particular and special note is the support of our owners – the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria – the Federal Ministry of Finance, Budget and National Planning and our supervising ministry – the Federal Ministry of Industry, Trade and Investment.” BOI said.
“With the successful conclusion of this deal, the Board and management of the Bank of Industry is confident that it is now better positioned to catalyze domestic production and facilitate job creation on a large scale, enhance local industry competitiveness, attract domestic and foreign investments, integrate our local industries into domestic, regional and global value chains, grow our export earnings and positively impact the overall economic development of Nigeria in line with its mandate, especially in light of the planned commencement of the African Continental Free Trade Agreement, AfCFTA, this month (January 2021),” the statement noted.