Global investor appetite for Africa drives over USD 7bn debt issuance in 2017
Mar 01, 2018
Standard Bank raised over USD 7bn of debt for African clients from global markets in 2017, driven by strong international investor appetite for Africa.
The funds raised will drive further growth for Standard Bank’s African clients on the continent, from supporting 800,000 cocoa farmers in Ghana with a USD1.3bn trade finance facility to funding acquisitions, and helping African corporates grow on the global stage. This was the case with a USD550m debut Eurobond for Liquid Telecom and a USD1bn Eurobond for Sibanye-Stillwater.
“With emerging markets sentiment remaining positive and interest rates within developed markets at historical lows, we are continuing to see strong appetite from international investors for high quality debt from Africa, which offers attractive returns,” says Megan McDonald, Head: Investment Banking, International at Standard Bank Group.
“Standard Bank Group’s international presence and capabilities in key financial centres across the globe, alongside our footprint in Africa, provides African clients with unparalleled access to global markets and the world’s biggest investors. Through these deals, we are assisting our clients in raising the necessary funding to fulfil their growth ambitions. These strategically important transactions will result in real change for the lives of Africans across the continent that we call home.”
The landmark deals on which Standard Bank advised on in 2017 include:
USD600m Eurobond for Helios Towers Africa - Joint Lead Manager and Joint Bookrunner (March 2017). This transaction represented the first benchmark Eurobond offering by a Sub-Saharan African corporate issuer in 2017. It is also the first ever international debt capital markets offering by a corporate with key operations in the DRC and Tanzania. Proceeds from the transaction were used to refinance existing indebtedness and finance acquisitions of tower sites, as well as a portion of capex.
USD1bn Eurobond for Sibanye-Stillwater - Joint Bookrunner (June 2017). This is the first Eurobond offering from Sibanye-Stillwater in the international debt capital markets, with proceeds being used to finance a highly strategic and transformative acquisition in the United States, which will enable it to become the third largest producer of platinum group metals in the world.
USD550m Eurobond (July 2017) and USD180m Eurobond Tap (November 2017) for Liquid Telecom – Joint Lead Manager and Bookrunner. The USD550m Eurobond deal represented a high-yield, debut issue for Liquid Telecom. Proceeds were used for general corporate purposes and the refinancing of term debt outstanding at the time of the offering, including a bridge loan related to the acquisition of Neotel. Following the July debut Eurobond offering, a USD180m Eurobond tap was launched off the back of a strong secondary market performance. This enabled Liquid to price at a yield significantly below that of its July offering and to repay its remaining amortising bank debt, further simplifying its capital structure, and to raise additional funds for general corporate purposes.
USD1.3bn Ghana Cocoa Board annual pre-export receivables backed trade finance facility (September 2017). Standard Bank was one of the co-ordinating Initial Mandated Lead Arrangers. The financing marked 25 years of Ghana Cocoa Board raising funds from the international market. The transaction achieved a successful syndication and closed significantly oversubscribed. The deal is the largest soft commodity pre-export financing transaction in Africa which supports over 800,000 cocoa farmers in Ghana.
USD600m Eurobond for Puma Energy – Joint Lead Manager and Bookrunner (October 2017). Puma issued USD600m of senior notes to fund a USD590m tender offer on its USD1bn 6.750% notes due 2021. The transaction allowed the company to lock-in new long-term funding at a very attractive interest rate, thereby extending its maturity profile and significantly reducing its cost of debt. The proceeds are being used to improve infrastructure in Africa.
USD400m Eurobond and USD256m tender offer for Fidelity Bank – Joint Lead Manager and Bookrunner (October 2017). Fidelity issued USD400m of 5-year senior notes to fund a USD256m tender offer on its USD300m 6.875% notes due 2018. This transaction was the largest combined new issue and liability management offering by a Nigerian issuer and effectively reopened the international bond markets for Nigerian Tier II banks. The Eurobond proceeds post-refinancing will be used to support the trade finance business of the bank.
USD1bn syndicated loan for the Government of Kenya - Mandated Lead Arranger and Bookrunner (April 2017). This funding was raised for the Government of Kenya from a syndicate of over 20 international financial institutions. The funding will be used to fund growth and development for the benefit of the Kenyan people.
USD300m Diaspora Bond for Government of Nigeria - International Joint Lead Manager (June 2017). It is a SEC registered programme aimed at raising funds from Nigerian citizens across the globe. The funds were used to part finance the implementation of Government’s 2017 Budget.
USD1.1bn syndicated loan for African Export-Import Bank (Afrexim) - Joint Bookrunner (June 2017). Funding raised from over 30 global financial institutions will enable Afrexim to fund and stimulate growth in trade finance across Africa. Funders ranged from across Europe, Africa and the Middle East.
USD850m Eurobond for BOAD (West African Development Bank) - Joint Lead Manager and Joint Bookrunner. This transaction is BOAD’s second issuance in international debt capital markets and represents the first 10-year US$ Eurobond from a Sub-Saharan African DFI, other than the AAA-rated AFDB. The proceeds of the transaction will be used to finance regional projects and for general corporate purposes, allowing BOAD to grow their lending business and enhance their role as development bank across francophone Africa.
As the largest bank in Africa by assets and with operations in 20 countries in Africa, Standard Bank is synonymous with transactions on the African continent. Standard Bank Group also has a presence in the six key international financial centres of London, New York, Dubai, Beijing, Hong Kong and Sao Paulo, providing clients in Africa with unparalleled access to global pools of capital and liquidity.