BOI Raises $1Bn from International Capital Market for SMEs

Bank of Industry (BOI) said it has raised €1 billion (approximately $1.11billion) from the international capital market, towards revitalising Nigeria’s industrial sector and creating 10 million jobs

Mr Kayode Pitan, managing director of BOI, in a statement on Friday in Lagos, said that the fund was in line with the focus of President Muhammadu Buhari’s administration.

Pitan said that the fund would leverage Nigeria Industrial Revolution Plan and the Economic Recovery and Growth Plan to achieve its target.

He said that the transaction was aimed at improving the capacity of the bank to effectively support Micro, Small, Medium and Large enterprises across key sectors of the economy.

According to him, it will help key sectors with affordable loans of medium to long-term tenor, alongside moratorium benefits.

“With the conclusion of the €1 billion medium term syndicated facility, BOI owned by the Central Bank of Nigeria and the Federal Ministry of Finance Incorporated, is poised to catalyse domestic production and job creation on a transformational scale.

“It will also enhance local industry competitiveness, attract domestic and foreign investments as well as integrate local industries into domestic, regional and global value chains,” he said.

The managing director said the fund would also grow export earnings and positively impact the overall economic development of Nigeria in line with its mandate.

The BOI boss said that African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the joint mandated lead arrangers, underwriters and book runners of the syndicated medium-term facility.

He added that the investors include the lead arrangers, alongside 20 other international financial institutions.

Pitan further said that the management team of BoI presented its information memorandum to an audience of about 60 potential investors in London in December 2019.

“The investors were particularly impressed with the business model and corporate governance structures of the bank.

“The transaction was subsequently launched on Jan. 15, with an initial size of €750 million.

“Upon closing on Feb. 19, the deal was oversubscribed by 60 per cent. The deal size was thereafter upsized to €1 billion,” he said.

Pitan said the transaction was a further confirmation of the acceptance of BoI in the international financial market, following its first successful fundraising transaction in 2017, which raised $750 million from a syndicate of 16 international banks.

He said that factors that led to the success of the transaction include, the impressive credit ratings of the bank Long Term Issuer Default Ratings of B+, B2 and Aa from Fitch, Moody’s and Agusto respectively.

He noted that CBN’s backing assisted in making the transaction successful, adding that it supported BOI with technical advice, approvals and 100 per cent currency swap to mitigate the foreign exchange rate risk.

The BOI boss said that the facility would be disbursed in Naira at single digit interest rate to borrowers with bankable projects.

Pitan added that the bank in 2019, disbursed ₦234 billion to 10,145 enterprises, and thus created an estimated one million direct and indirect jobs.