Afrexim calls issue for US dollar denominated bonds

The Dollar Business Bureau

The African-Export-Import bank (Afreximbank), currently rated Baa1 by Moody's has called out for proposals for a US-dollar-denominated bond issue. A US denominated bond that trades outside the US, is issued to attract investors at the same time also hedge currency risks.

The call by the EXIM bank trails the previous week announcement of a $700 mn loan backed by 14 lenders, involving majorly financial institutions such as Emirates NBD, Abu Dhabi Commercial Bank and Barclays Bank. The bank in the previous year had also tapped the international bond market with a total of $900 mn bond in two tranches. The first was a $750 mn bond for a five year term in May, and the second was a $150 mn one during November. Banking sources indicated that Mitsubishi UFJ financial group along with Barclays, HSBC, Standard Chartered and Rand Merchant Bank came together to form a $3 bn medium term note program for these bonds.

Besides bonds, the bank also raised a loan worth $106 mn, split between US dollars and yen, codenamed 'Samurai Loan', as it involved Japanese lenders. The Cairo headquartered financial institution had been funding new projects through debt instruments, but in recent times has struggled to do so owing to a slump in commodity prices in Africa.