In a sign of robust global investor interest in the continent, Africa Finance Corporation, a multilateral development financial institution dedicated to infrastructure financing in Africa, successfully issued a Eurobond at its lowest yield to date.
The US$750 million 2.875% 144a/ Reg S Notes due 2028 were priced at 175 bps over US Treasuries to yield 2.991%. The Corporation has progressively reduced its funding cost on dollar benchmark issuances with a shorter dated 5-year US$700 million Eurobond in 2020 at 3.250%, a 10-year US$500 million Eurobond in November 2019 at 3.895% and a 7-year US$650 million Eurobond in June 2019 at 4.500%.
AFC is focused on bridging Africa’s large infrastructure deficit by financing projects that have high developmental impact on the economies of African countries. The final order book was 3.5 times oversubscribed at approximately US$2.6 billion, with funds coming from more than 200 investors, across the UK (32%), Continental Europe (23%), Middle East (22%), Asia (13%), and the US/Americas (10%).
“This reflects investor confidence in AFC’s mandate and investment strategy, which is particularly critical at a time when the COVID-19 pandemic has challenged Africa’s development,” said Samaila Zubairu, President & CEO of Africa Finance Corporation. “AFC will continue to mobilize capital for investments to accelerate sustainable development impact with greater focus on reducing Africa’s energy deficit and job creation challenges through climate resilient infrastructure, energy transition and other projects driving Africa’s economic recovery post-COVID.”
AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and deployment of risk capital to address Africa’s infrastructure and industrial development needs.
This is the sixth Eurobond under AFC’s US$5 billion Global Medium-Term Note programme, which is rated A3 by Moody’s Investors Service. The Corporation will use proceeds from the bond to continue investing in critical infrastructure that delivers on its long-term vision to drive social, economic and sustainable change across Africa.
Banji Fehintola, Senior Director & Treasurer of AFC, said: “This successful issuance follows a year of severe market disruption exacerbated by the COVID-19 pandemic. The appetite and pricing are an endorsement of the Corporation’s long-term prospects and reflects our strong credit profile and established market presence. We are also delighted with the strong demand from a diverse pool of accounts, which has further diversified our funding sources.”
The bond issuance was arranged by BofA Securities, First Abu Dhabi Bank, Goldman Sachs International, J.P. Morgan and MUFG as Joint Bookrunners with White & Case, Clifford Chance and Aluko & Oyebode as legal advisers.
Notes to Editors
About AFC – www.africafc.org
AFC was established in 2007 to be the catalyst for private sector-led infrastructure investment across Africa. It is the second highest investment-grade rated multilateral financial institution in Africa. AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth. AFC invests in high-quality infrastructure assets that provide essential services in the core sectors of power, natural resources, heavy industry, transport, and telecommunications. To date, the Corporation has invested over US$9.1 billion in projects in 35 countries across Africa.
This communication is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States or any other jurisdiction where to do so would be unlawful. The Issuer has not registered, and does not intend to register, any portion of the Notes in any of these jurisdictions and does not intend to conduct a public offering of securities in any of these jurisdictions. In particular, the Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws. In the United States, the offer is being made only to qualified institutional buyers (“QIBs”) within the meaning of Rule 144A under the Securities Act who are also qualified purchasers (“QPs”) as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940, as amended, or in reliance on another available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Outside the United States, the offer is being made to non-U.S. persons in offshore transactions in accordance with Regulation S under the Securities Act. Prospective purchasers are hereby notified that the sellers or issuers of the Notes may be relying on the exemption from the registration requirements of the Securities Act provided by Rule 144A of the Securities Act or another available exemption from registration.
This communication is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1120 (the “Prospectus Regulation”). The final base prospectus and related final terms prepared pursuant to the Prospectus Regulation can be obtained (when published) from https://www.euronext.com/en/markets/dublin. Investors should not subscribe for any Notes except on the basis of information contained in the final base prospectus.
This document does not constitute an offer of the securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the securities. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (iii) high net worth entities falling within Article 49(2)(a) to (d) of the Order; and (iv) other persons to whom it may lawfully be communicated (all such persons in (i), (ii), (iii) and (iv) above together being referred to as “relevant persons”). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
The Notes may not be offered or sold to the public within Nigeria to, or for the account or benefit of, persons resident in Nigeria unless the Notes have been registered with and approved by the Nigerian Securities and Exchange Commission (“Nigerian SEC”) pursuant to the Nigerian Investments and Securities Act No. 29 of 2007 (“ISA”). The Notes may also be offered and sold to selected investors in Nigeria by private placement or as a domestic concern within the exemption and meaning of Section 69 (2) of the ISA and with the approval of the Nigerian SEC.
A securities rating is not a recommendation to buy, sell or hold Notes and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency. As of the date of this pricing term sheet, Moody’s Investors Service Ltd is established in the United Kingdom and is registered under Regulation (EU) No 1060/2009 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”).
UK MiFIR product governance / Professional investors and ECPs only target market – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of any securities Issuer referred to in this announcement has led to the conclusion that: (i the target market for the Notes is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; and (ii) all channels for distribution of the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending such securities (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to UK MiFIR is responsible for undertaking its own target market assessment in respect of such securities (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
In connection with its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the Securities and Futures Act (Chapter 289 of Singapore), the Issuer has determined, and hereby notifies all relevant persons (as defined in Regulation 3(b) of the Securities and Futures (Capital Markets Products) Regulations 2018 (the “SF (CMP) Regulations”) that the Notes are “prescribed capital markets products” (as defined in the SF (CMP) Regulations) and “Excluded Investment Products” (as defined in MAS Notice SFA 04 N12: Notice on the Sale of Investment Products and MAS Notice FAA N16: Notice on Recommendations on Investment Products).
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