Africa Finance Corporation (AFC) Successfully Priced its inaugural Hybrid Bond Raising US$500 million for Transformative Infrastructure Projects
African Finance Corporation (AFC) (www.AfricaFC.org), the continent’s leading provider of infrastructure solutions, has successfully priced a US$500 million perpetual hybrid bond. This landmark transaction is AFC’s first hybrid bond issuance and demonstrates AFC’s leadership in accessing global capital markets and financing transformative infrastructure projects on the African continent.
AFC’s first perpetual bond was priced at 7.50% with no fixed term, attracting strong demand. The order amount reached a maximum of US$1.1 billion, and was ultimately oversubscribed by 1.5 times. The issuance will further strengthen AFC’s strong capital position while providing investors with certainty during an initial 5.25-year non-callable period, after which the company will manage the bond in line with its financial strategy. By blending the characteristics of equity and debt, this hybrid vehicle provides 100% equity credit approval from Moody’s Investors Service, strengthening AFC’s balance sheet while maintaining financial flexibility to support long-term growth.
Samaila Zubairu, President and CEO of Africa Finance Corporation, said: “This landmark first-time hybrid bond issuance underscores AFC’s unwavering commitment to advancing bold and transformative fundamentals in Africa facilities projects. ” “Despite tight financial conditions, we are mobilizing global capital through innovative financial instruments to support Africa’s sustainable development, industrialization and integration. ”
“This hybrid bond issuance is an important milestone for the AFC and the African continent,” said Banji Fehintola, member of the AFC’s executive board and head of financial services. “It demonstrates global investors’ interest in the AFC’s presence in Africa. Confident in our ability to deliver transformative growth, we are well positioned to drive infrastructure solutions that accelerate Africa’s industrialization and economic transformation by strengthening our equity base and diversifying our funding sources.”
AFC’s perpetual non-call 5.25-year hybrid issuance sets a new benchmark for African institutions seeking to diversify their funding sources and builds on the company’s proven expertise in structuring complex instruments to attract global investors and open up new opportunities for the continent New capital markets. AFC secured a $1.16 billion syndicated loan last year, its largest international deal to date, attracting first-time lenders from Europe, the Middle East and Asia. In 2023, the company welcomed its first non-African equity investor, Export-Import Bank of Turkey, which invested $110 million, its first investment in an African entity.
The AFC’s latest deal reflects growing confidence in hybrid bonds as a financing tool for multilateral development banks, following the African Development Bank’s (AfDB) maiden issuance of hybrid bonds last year – the first hybrid bond issued by a multilateral development bank.
BofA Securities, Emirates NBD Capital, J.P. Morgan, Mashreq, MUFG and Societe Generale acted as joint lead managers for the offering. Proceeds from the transaction will be used to further strengthen the company’s capitalization and balance sheet metrics to advance AFC’s mission to drive structural transformation in Africa through high-impact projects such as the Lobito Corridor Railway Project, which connects resource-rich landlocked countries Connecting to global markets; the Red Sea Power Project is helping Djibouti become fully dependent on renewable energy; and the rise of integrated industrial projects will reduce import dependence while creating high-value jobs.
The AFC’s hybrid bond issuance will pave the way for more innovative financing solutions, unlocking global capital and accelerating the continent’s economic transformation.
Distributed by APO Group on behalf of the African Finance Corporation (AFC).
Media enquiries:
Yewande Thorpe
communication
africa finance corp.
Mobile: +234 1 279 9654
e-mail: yewande.thorpe@africafc.org
About AFC:
AFC was established in 2007 to promote pragmatic infrastructure and industrial investment in Africa. AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and venture capital to meet Africa’s infrastructure development needs and drive sustainable economic growth.
For seventeen years, AFC has been Africa’s partner of choice, with a proven track record of investing in and delivering useful, high-quality infrastructure assets that serve core infrastructure sectors such as power, natural resources, heavy industry, and transport. Basic services. telecommunications. The AFC has 44 member countries and has invested US$15 billion across Africa since its inception.
