Bank of Industry completes landmark €1bn guaranteed senior loan facility aimed at enhancing diversification

NIGERIA'S Bank of Industry (BoI) has successfully completed a landmark €1bn guaranteed senior loan facility to further enhance its capacity to deliver on its mandate in line with the government's economic diversification agenda.

Founded in 1959, he BoI is the oldest and largest development finance institution currently operating in Nigeria. Owned by the state, the Ministry of Finance Incorporated Nigeria has a 94.80% stake, the Central Bank of Nigeria has a 5.19% and private shareholders own 0.01%= in the bank, which has 11 members on its board and it is chaired by Aliyu Abdulrahman Dikko.

According the BoI, the initial mandated lead arrangers (Imlas) and underwriters for the senior phase of the transaction, led and coordinated by Africa Finance Corporation and Standard Chartered Bank, include Abso Bank, First Abu Dhabi Bank PJSC, FirstRand Bank London Branch, Moshreqbonk PSC, Nedbank and SMBC Bank International. Meanwhile, the African Export-Import Bank (Afreximbank) is the agent bank.

A BoI spokesman said: “A syndicate of financial institutions arranged by the Imlas has indicated strong interest in participating in the general phase of the ongoing syndication and BoI has an option to increase the facility size up to €1.5bn after the general syndication. The deal is quite unique and the first of its kind by any financial institution in Nigeria both in terms of its size and structure.

“The transaction structure leverages the strong investment grade credit rating to wrap and credit-enhance BoI, thereby benefitting from favourable terms that would otherwise not be available especially in these highly volatile markets. The pricing, at three months Euribor (floored at zero) + 1.65% per annum, is a result of this innovative structuring."

BoI managing director Kayode Pitan, added: “At a time when international capital markets are shut to many borrowers and when capital is prohibitively expensive, through this innovative transaction structure and the AFC Guarantee, BOI was not only able to raise liquidity but also able to diversify its funding sources and attract new lenders. This is the fifth time BoI has successfully raised funds in the international markets since 2018.

"With the conclusion of this transaction, total funds raised by the bank from 2018 to date is in excess of $5bn. The proceeds of this deal, like in our previous ones, will be utilised to provide much needed medium to long term finance to Nigerian MSMEs and large enterprises with bankable transactions at affordable naira interest rates.

"Between 2015 and 2021, the Bank of Industry with the support of its various stakeholders disbursed over N1.2trn to 4,205,920 enterprises, thus creating over 9,048,444m estimated direct and indirect jobs.”