Afreximbank, SEC Sign N300bn Deal
The African Export-Import Bank (Afreximbank) and the Securities and Exchange Commission(SEC) have signed documents to complete the registration of a N300 billion medium-term note under the Bank’s local currency programme.
President Afreximbank, Prof Benedict Oramah, said at the signing ceremony that the Naira debt capital market activity which the programme would unlock would open the door to a new value-added relationship between Afreximbank and Nigeria.
The information was contained in a statement that was issued by Afreximbank’s head of Communications, Obi Emekekwue He explained that, over the last few years, many of the Bank’s key clients had made requests for local currency funding, saying that that Afreximbank designed and launched a local currency programme in 2016 with the primary aim of providing financing to African entities in major domestic and regional supply chains, particularly those that did not generate hard currency receivables.
“In addition, we believed that using the debt capital markets in our member countries to raise the funding would contribute to the development of capital markets in those countries,” explained the president.
“Adequate and competitive local currency funding, through a pre-export financing arrangement will help these entities to create the necessary capacities to produce the goods required for export markets,” Prof Oramah said.
“The Bank’s local currency funding programme is part of the broad set of programmes designed to ensure Africa’s preparedness for the commencement of the AfCFTA. More importantly, it is part of Afreximbank’s objective of expanding the use of local currencies in the conduct of intra-African trade, as, together with the Bank’s Pan-African Payment and Settlement System, it will ensure that all foreign currency risks that have inhibited intra-regional trade are minimised considerably.”
Speaking at the occasion, Dr Demola Sogunle, chief executive, Stanbic IBTC Bank Plc, said that the Afreximbank initiative was another noteworthy example of global best practice in treasury management and innovation to stay abreast of evolving market conditions.
“The establishment of the bond programme will aid in stimulating the expansion and development of Nigeria through Afreximbank’s intervention in various sectors of the Nigerian economy,” said Dr Sogunle.
Expressing Stanbic IBTC Capital’s commitment to developing the Nigerian capital markets and driving financial innovation by advising clients on staying ahead of changing times, he said that the bank was pleased to assist Afreximbank in shaping its funding strategy. Following approval of the Local Currency Funding Programme by the Afreximbank Board of Directors in response to rising demand for financing facilities denominated in local currencies from the West Africa Economic and Monetary Union, Rand area countries, Nigeria, East Africa and some parts of North Africa, the Bank, in 2017, began the process of registering the first note programme in the Nigerian Naira.
Under the Nigeria Naira Note Programme, dubbed “Project Ramesses”, Afreximbank, acting as an “Issuer” of notes, seeks to establish a 300,000,000,000-Naira Medium-Term Note Issuance Programme and the issuance and offering of subsequent notes, subject to approved pipeline of Naira facilities.
Afreximbank appointed Stanbic IBTC Capital Limited as Lead Issuing House/Bookrunner and Chapel Hill Advisory Partners Limited, Lead Capital PLC, PAC Capital Limited and Vetiva Capital Management Limited as joint Issuing Houses/Bookrunners.
