Africa Finance Corp. attracts fresh capital from Asia and the Middle East

The Africa Finance Corporation (AFC) has raised $400m in a new syndicated loan to support the development of infrastructure on the continent and aid in the post-pandemic recovery.

Strong interest from investors led to the offering being 2.5 times oversubscribed, leading to a total facility of $100m above the initial target. This is the AFC’s first three-year facility since 2018.

“The proceeds will facilitate upcoming infrastructure projects that address the continent’s developmental challenges,” the AFC said in a statement.

Moody’s recently improved its outlook for AFC’s investment grade credit ratings to ‘stable.’ Its senior unsecured ratings at A3 and short-term issuer ratings at P-2 are the second highest of any institution in Africa.

Key participating lenders as bookrunners and mandated lead arrangers include Absa Bank, Bank of China (London branch), First Abu Dhabi Bank PJSC, ICBC (London), Mashreq Bank PSC of Dubai, MUFG Bank of Japan, Nedbank (London branch), Rand Merchant Bank (a division of FirstRand Bank, London branch), Standard Chartered Bank and SMBC Bank International, acted as Bookrunners and Mandated Lead Arrangers.

On their side, the Korea Development Bank and Standard Bank of South Africa acted as Mandated Lead Arrangers, while MUFG Bank Ltd and ICBC (London) also acted as Facility Agent and Documentation Agent, respectively.

Last year, the AFC revealed plans to step up its infrastructure financing in Africa with a new asset management division, AFC Capital Partners. Its debut offering, the Infrastructure Climate Resilient Fund (ICRF) is planning to raise $500m this year and $2bn over the next three years.

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