Africa Finance Corporation issues US$150 million maiden Sukuk MyZA

Africa Finance Corporation issues US0 million maiden Sukuk:

Africa Finance Corporation (AFC) (www.AfricaFC.org), a leading pan-African multilateral development finance institution and project developer, has issued its maiden Sukuk, the highest-rated 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. Emirates 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, commented on the announcement: “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 international 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.

Distributed by APO on behalf of Africa Finance Corporation (AFC).

About Africa Finance Corporation (AFC):
AFC (www.AfricaFC.org) is a dynamic, international investment grade multilateral finance institution whose mission it is to help bridge Africa’s significant infrastructure gap whilst delivering competitive financial returns, robust economic growth and positive social impact.

Established in 2007 to be the catalyst for private sector infrastructure investment across Africa, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. A successful borrowing programme has raised more than US$ 3.5 billion for AFC’s activities, including the Corporation’s debut US$ 750 million Eurobond issue which was over 6 times oversubscribed. In terms of impact, AFC has invested more than US$ 4 billion in projects across 26 African countries to date.

AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital tailored to addressing Africa’s unique infrastructure development needs in the core sectors of power, natural resources, heavy industry, transport, and telecommunications.

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