LIVE UPDATES
The African Export-Import Bank (Afreximbank) has successfully orchestrated a syndicated crude oil prepayment facility totaling US$3.3 billion, sponsored by the Nigerian National Petroleum Company Limited (NNPCL). An initial disbursement of US$2.25 million has already been made, with an additional tranche of US$1.05 million expected to follow.
United Bank for Africa Plc (UBA) played a pivotal role as the Local Arranger and Onshore Account Bank for this landmark transaction. The initiative is poised to alleviate foreign exchange illiquidity and bring stability to the Nigerian currency market, marking a significant stride in unlocking Nigeria's economic potential.
This colossal financing stands as Nigeria's largest crude oil prepayment facility and ranks among the most substantial syndicated loans raised in Africa in 2023. The 5-year facility carries a margin of 6.0% per annum above the 3-month secured overnight financing rate (SOFR). Notably, the transaction structure incorporates an embedded price balance mechanism, releasing 90% of excess cash from committed barrel sales to the borrower after debt service, while the remaining 10% pre-pays the facility, effectively shortening its final maturity.
The initial participating lenders include Afreximbank, Gunvor International BV—a Geneva-based multinational energy and commodities trading company, and Sahara Energy Resources Limited—an African-owned international energy and infrastructure conglomerate.
Afreximbank, leveraging its extensive experience in structuring complex oil & gas financing facilities across Africa, served as the Sole Mandated Lead Arranger, Technical and Modelling Bank, Bookrunner, Facility Agent, Offshore Account Bank, Intercreditor Agent, and Collateral Agent. Despite a challenging market environment, the bank successfully closed the facility.
Prof. Benedict Oramah, President and Chairman of the Board of Directors at Afreximbank, emphasized the bank's commitment to supporting African economies, stating, "This facility further demonstrates the Bank’s commitment to supporting African economies when such assistance is most needed."
NNPCL Group Chief Executive Officer, Mr. Mele Kolo Kyari, highlighted the strategic use of the facility's proceeds to enhance macro-economic stability, while Oliver Alawuba, Group Managing Director/CEO of UBA, expressed the bank's delight in participating, affirming UBA's commitment to providing crucial interventions for economic challenges in Nigeria and across Africa.
