BOI Concludes Fresh €1bn Landmark Transaction to Enhance Capacity

The Bank of Industry (BoI) has announced that it has successfully completed a landmark EURO 1 billion Guaranteed Senior Loan Facility to further enhance its capacity to deliver on its mandate, in line with President Muhammadu Buhari’s economic diversification agenda.

BOI in a statement said the initial mandated lead arrangers (IMLAs) and underwriters for the senior phase of the transaction, led and coordinated by Africa Finance Corporation (AFC) and Standard Chartered Bank, include Abso Bank Limited (acting through its Corporate and Investment Banking division); First Abu Dhabi Bank PJSC; FirstRand Bank Limited (London Branch), acting through its Rand Merchant Bank division; Moshreqbonk PSC, Nedbank Limited, London Branch; and SMBC Bank International Plc.

The African Export-Import Bank (Afreximbank) is the Agent Bank.

“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 EURO 1.5 billion 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 of AFC (rated A3 with a Stable Outlook by Moody’s) 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 3 months Euribor (floored at zero) + 1.65% per annum, is a result of this innovative structuring, “the statement reads.

Commenting on the deal, the Managing Director of BOI, Mr Kayode Pitan, said, “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 5th 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 $5 Billion.

“The proceeds of this deal, like in our previous ones, will be utilized 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 N1.2 Trillion to 4,205,920 enterprises, thus creating over 9,048,444 million estimated direct and indirect jobs,” Pitan said.

“The Board, Management and entire staff of the Bank would like to express their profound appreciation for the unflinching support of our majority shareholders – the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria (CBN).

We also express deep appreciation to the Federal Ministry of Finance, Budget and National Planning and our supervising ministry, the Federal Ministry of Industry, Trade and Investment.

The Governor of the Central Bank of Nigeria and the CBN Committee of Governors supported BoI by providing a full guarantee to facilitate the AFC guarantee and a 100% currency swop to mitigate the foreign exchange rate risk, “the statement added.