The
loan will be used for the construction and operation of a Greenfield
crude oil refinery and a Greenfield fertiliser manufacturing plant
The African Development Bank’s (AfDB)
application to establish a N160 billion medium term note programme in
the Nigerian capital market has been approved by the Securities and
Exchange Commission (SEC).
The bank’s N160 billion programme will
be used to finance a growing pipeline of projects requesting loans in
Nigerian naira in the following sectors: infrastructure, services and
industries, and financial sector.
The SEC’s approval also included a
“No-Objection” for AfDB to commence the book-building process for a
planned issuance of a first tranche of N16.2 billion under the
programme.
The bank will seek to start the
book-building process as soon as mid-June, with the plan to issue by the
end of the month, subject to favourable market conditions. Members of
the bank’s treasury team were recently in Nigeria to sound the market
for the upcoming issuance, where they received positive feedback.
Institutional investors were looking forward to adding diversity to
their portfolios and welcomed the bank’s proposed offering.
The proceeds of the first bond issuance
will be used to finance a line of credit to a financial institution
which will on-lend to corporates in the services and industries sector; a
pipeline of infrastructure projects; and to small and medium sized
enterprises (SMEs).
In line with its’ Local Currency
Initiative, AfDB approves African currencies as lending currencies
whenever there is sufficient demand for local currency loans, and where
the bank can fund itself cost-effectively. This initiative allows the
bank to establish medium term note (borrowing) programmes in designated
African currencies (including the naira which was designated a lending
currency of the bank in December 2012); and to issue local currency
bonds within the framework of the programme and in line with underlying
demand from the bank’s borrowing clients.
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