Africa Finance Corp raises US$625million loan I Ghana in US$2.6 billion debt talks with Pension Funds.
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Africa Finance Corp raises US$625million loan I Ghana in US$2.6 billion debt talks with Pension Funds.
Plus Standard Bank partners DP World to offer Trade Finance Solutions
Good Day,
Your essential financial newsletter for the Africa-focused investment manager, business leader and decision maker.
In today’s edition :
Syndicated Finance: AFC raises $625 million loan to diversify its debt profile
Pension Funds: Ghana starts $2.6 billion debt restructuring talks
Trade Finance: DP World and Standard Bank offer Trade Finance Solutions
Syndicated Finance
Africa Finance Corp diversifies its debt profile with a US$625 million syndicated loan
Africa Finance Corporation, the continent’s leading infrastructure solutions provider has secured a US$625 million syndicated loan. The latest funding will strengthen the firm network of investors while increasing its access to global capital markets.
The funding round had an oversubscription of 61%, considering the initial investment target was US$500 million.
Some of the investors are Gulf Bank, National Bank of Ras Al-Khaimah, China CITIC Bank Corporation, Qatar National Bank, Doha Bank and Industrial Bank of Korea Limited.
The AFC recently reported a 52% increase in total comprehensive income to US$285.3million
The investors’ participation in this funding round indicates AFC's creditworthiness and prominent investing capacity in the private sector-led Africa Infrastructure space.
Pension Funds
Ghana’s pension funds target US$2.6 billion debt restructuring.
Ghana’s leading pension funds are in the process of agreeing to a debt restructuring deal worth US$2.6 billion of government bonds as reported by Bloomberg. This follows the US$3 billion loan under the Extended Credit Facility (ECF) that was recently approved by the International Monetary Fund (IMF) , with the first tranche of US$600 already disbursed.
42% of Ghana’s domestic debt is held by local commercial entities including 13% held by local commercial banks, though the public debt to GDP rate is fast approaching 100%.
Under the proposed discussion the pension funds will receive more interest rates over a more extended period.
The Pension Funds will exchange their 18.5% current coupons for new bonds with an average interest rate of 8.4% maturing in 2027 and 2028 with an additional cash payment bond offering 18 %
The projected total coupon payments to the pension funds will be approximately 21%,
Without these discussions, 21 out of the 28 pension trustees will face capital and operational challenges.
Ghana will have a financing gap of US$15.06 billion between 2023-26 according to IMF of which US$4.5 billion (30%) will be received through official financing from the IMF and World Bank. The remaining US$10.51 billion(70%) is expected to be achieved through restructuring its external debt mainly with Eurobond debtors.
Trade Finance
Standard Bank partners with DP World to offer African companies trade finance solutions
Logistics giant DP World has partnered with South Africa’s Standard Bank to offer financing solutions to African companies on the DP World Trade Finance platform
This will meet the growing demand fby Africa companies for logistics and financial support needed to connect with global trade routes.
The Trade Finance Platform currently has 23 financial institutions offering various options
DP World has reported a credit limit submission of over US$700 million
Standard Bank is now the first African bank to join DP World Trade Finance
As African economies look to review their export potential, trade solution with supportive local banks will offer the opportunity local merchants and businesses to think access global markets.
Development Finance
Gravita India receives €34 million credit facility. for new West African industrial recycling plants.
Proparco the subsidiary of the French Development Bank (AFD) group and the Austrian Development Bank (OeEB) have issued a €34 million credit facility to Gravita Netherlands, the international division of Gravita India to build new industrial recycling plants in Senegal and Ghana.
The new recycling facilities will provide Gravita with additional capacity to enter new markets, including rubber and copper.
The company recently commissioned a 3,000-tonne-per-year waste rubber recycling which will produce pyrolysis oil, for its own consumption
It also commissioned a new 1,200 tonnes a year recycling plant in Ghana
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