Nigeria Receives US$2.5 Billion Facility from Afrexim Bank, UBA as Local Arranger
Nigeria has secured the first tranche of a US$2.5 billion facility arranged by the African Export-Import Bank (Afrexim Bank), with United Bank for Africa (UBA) acting as the local arranger. UBA, a prominent member of the FUGAZ group, has been designated as the mandated local arranger for this significant liquidity support facility.
Afrexim Bank, as the Mandated Lead Arranger, played a critical role in this financial endeavour, with the transaction officially signed on December 29, 2023. This marks a milestone in the financial cooperation between the involved entities, following a recent $150 million deal.
In this strategic arrangement, Afrexim Bank, in its role as the Mandated Lead Arranger, worked closely with UBA, which assumed the responsibility as the Local Arranger. The facility was successfully finalized with NNPC Limited acting as the principal financier, with Guvnor and Sahara Energy also participating in the transaction.
The total transaction value is US$3.3 billion, with the first tranche amounting to US$2.25 billion. This sum will be deposited into a designated account at the Central Bank, aiming to alleviate forex liquidity pressures. UBA serves as the Local Arranger, while Afrexim Bank is the Mandated Lead Arranger. UBA also functions as the Onshore Depository Bank for this arrangement.
NNPC facilitates the financing of this transaction, acting as a lender, with other major oil trading firms like Sahara Energy, Vitol, Oando, and Gunvor involved as sub-lenders. Each of these firms has contributed $100 million to the facility.
The remaining balance of the facility, US$1.05 billion, is scheduled for disbursement in January 2024. The coupon for the transaction is set at 11% per annum.
These developments are supposedly aimed at addressing Nigeria’s forex challenges, with various entities working to develop solutions to enhance the country’s economic outlook.
Source: Nairametrics
