Nigeria: Domestic production boosted by USD 1 billion capital market fund

The Bank of Industry (BOI) in Nigeria says it has raised €1 billion (about $1.11billion) from the international capital market to revitalise Nigeria’s industrial sector and create 10 million jobs.Mr. Kayode Pitan, Managing Director of BOI, said in a statement on Friday in Lagos, that the fund would leverage the Nigeria Industrial Revolution Plan and the Economic Recovery and Growth Plan of the government to achieve its target.

Pitan said that the transaction was aimed at improving the capacity of the bank to continue to effectively support Micro, Small, Medium and Large enterprises across key sectors of the economy, with affordable loans of medium to long-term tenor, alongside moratorium benefits.

“With the successful conclusion of this €1 billion medium term syndicated facility, BOI, which is owned by the Central Bank of Nigeria and the Federal Ministry of Finance Incorporated, is poised to catalyse domestic production and job creation on a transformational scale.

“It will also enhance local industry competitiveness, attract domestic and

foreign investments, integrate our local industries into domestic, regional and global value chains.

“Grow our export earnings and positively impact the overall economic development of Nigeria in line with its mandate,” he said.

According to him, African Export-Import Bank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation were the Joint Mandated Lead Arrangers, Underwriters and Book runners of the Syndicated Medium-term Facility.

He added that the investors included the Lead Arrangers, alongside 20 other international financial institutions.

Pitan disclosed that the management team of BOI presented its information memorandum to an audience of about 60 potential investors in London in December 2019.

“The investors were particularly impressed with the business model and corporate governance structures of the bank.

“The transaction was subsequently launched on January 15, with an initial size of €750 million.

“Upon closing on Feb. 19, the deal was oversubscribed by 60 percent. The deal size was thereafter upsized to a sum of €1 billion,” he said.

itan said that the transaction was a further confirmation of the acceptance of BOI in the international financial market, following its first successful fundraising transaction in 2017, which raised $750 million from a syndicate of 16 international banks.

According to him, factors that led to the success of the transaction includes the impressive credit ratings of the bank Long Term Issuer Default Ratings of B+, B2

and Aa from Fitch, Moody’s and Agusto respectively.

He added that its ISO certifications in both Quality Management Systems and Information Security, as well as the strong strategic partnership that BOI had developed with the Nigerian commercial banks, who provide credit enhancements and de-risking tools to BOI customers.

He noted that the support of the Central Bank of Nigeria assisted to drive the transaction to success, adding that it supported BOI with technical advice, approvals and 100 percent currency swap to mitigate the foreign exchange rate risk.

The BOI boss disclosed that the facility would be disbursed in Naira at single digit interest rates to borrowers with bankable projects.