"Crude oil prepayment facility: UBA, Afreximbank announce $2.25bn initial disbursement"

" Crude oil prepayment facility: UBA, Afreximbank announce $2.25bn initial disbursement \r\n United Bank for Africa Plc \u00a0(UBA) and the African Export-Import Bank ( Afreximbank ) have announced an initial disbursement of $2.25 billion under a syndicated $3.3 billion\u00a0 crude oil \u00a0prepayment facility sponsored by the Nigerian National Petroleum Company Limited ( NNPCL ).\r\n\r\nA second tranche of $1.05 million is expected to be disbursed subsequently.\r\n\r\nThis is the largest syndicated loan ever raised by Nigeria in the international market and one of the largest syndicated transactions in Africa in recent years.\r\n\r\nThe 5-year facility carries a margin of 6.0 percent per annum above the 3-month secured overnight financing rate (SOFR).\r\n\r\nThe facility will support Nigeria\u2019s macroeconomic stability and long-term economic growth, facilitating access to raw materials and trade development.\r\n\r\n\u201cThis facility further demonstrates the bank\u2019s commitment to supporting African economies, when such assistance is most needed. Afreximbank stands by its member countries in good and in difficult times,\u201d Benedict Oramah, president and chairman of the board of directors, Afreximbank stated.\r\n\r\nAccording to him, the disbursement of the initial $2.25 billion under the facility will support Nigeria\u2019s long-term economic stability, ease access to import financing for raw materials and essential goods, support industrialization and trade development efforts.\r\n\r\n\u201cWe are pleased that despite the typical year-end pressures, our partners and investors committed the funds required in record time,\u201d Oramah stated.\r\n\r\nThe transaction structure has an embedded price balance mechanism where 90 percent of all excess cash from the sale of the committed barrels (after debt service) will be released to the borrower.\r\n\r\nAlso, the balance of 10 percent will be used to prepay the facility, effectively shortening the final maturity of the facility and freeing cashflow from future pledged cargoes for use by Nigeria.\r\n\r\n\u201c UBA \u00a0is delighted to participate in this transaction, which demonstrates once again UBA\u2019s commitment to providing necessary interventions and solutions towards addressing economic issues in Nigeria and across Africa,\u201d Oliver Alawuba, group managing director\/CEO,\u00a0 UBA , stated.\r\n\r\nAccording to him, UBA has a track record of structuring and participating in significant resource-based transactions, leveraging its global network and dollar balance sheet. \u201cSimilar transactions include DRC deal, Kenyan deal, Senegal SAR Orion deal with Afreximbank,\u201d he disclosed.\r\n\r\nMele Kolo Kyari, group CEO,\u00a0 NNPCL , stated that the proceeds of the facility have been made available to the Federal Government (FG) as one of the strategies to improving macro-economic stability.\r\n\r\n\u201cThe participation of global, international and regional syndication firms is a further testament to the lending market\u2019s appetite for financing sponsored by NNPCL and signifies solid market confidence in Nigeria,\u201d Kyari stated.\r\n\r\nThe initial participating lenders are Afreximbank, Africa\u2019s multilateral trade finance institution, Gunvor International BV, a Geneva-based multinational energy and commodities trading company and Sahara Energy Resources Limited, an African-owned, leading international energy and infrastructure conglomerate.\r\n\r\nAfreximbank\u2019s extensive structuring and technical experience in arranging similar complex\u00a0 oil and gas \u00a0financing facilities in Angola, Republic of Congo, South Sudan, Chad, Egypt, Cote d\u2019Ivoire and Ghana, was brought to bear in the successful closure of the facility, notwithstanding the challenging market environment.\r\n\r\nThe bank acted as sole mandated lead arranger, technical and modelling bank, bookrunner, facility agent, offshore account bank, intercreditor agent and collateral agent.\r\n "

"Crude oil prepayment facility: UBA, Afreximbank announce $2.25bn initial disbursement"

DDEP: Gov’t makes GHS 200m payment to institutional investorsAMP

IMF African Deputy Director confident in Board approval of $360m disbursement after review in JuneAMP

GSE launches Commercial Paper Market to provide short-term financing for businessesAMP