MUFG and African Export-Import Bank (Afreximbank) have closed a ground-breaking $520 million facility, the first to be covered by Nippon Export and Investment Insurance (NEXI). NEXI's proactive support for this facility was agreed on the basis of Afreximbank being a strategic partner, participation from Japanese investors, and the deal contributing to the UN's Sustainable Development Goals (SDGs).
MUFG was the sole Mandated Lead Arranger, Bookrunner, Agent and NEXI Coordinator on the transaction, with the documentation closing on 3 December 2020. The facility fully aligns with Afreximbank's strategic priorities in the area of intra and extra African trade and investment, export manufacturing, as well as industrialisation. These objectives find common ground with NEXI's objectives of supporting sustainable African growth and development in line with TICAD objectives.
Afreximbank will use the proceeds towards its Pandemic Trade Impact Mitigation Facility (PATIMFA) which was launched in March 2020 to help African sovereigns, commercial banks and corporates to weather the impact of the crisis due to the COVID-19 pandemic. The facility will support the Bank's interventions in response to the COVID-19 pandemic and will be used to finance trade and trade related investments which contribute to the sustainable development of the socioeconomic, health, manufacturing, environmental, agri and agri-related sectors across the 51 African Member States of Afreximbank.
Working together with NEXI and Afreximbank, MUFG was able to access under-utilised Japanese liquidity, resulting in an extremely successful outcome of distribution to Japanese investors, many of which were new investors for Afreximbank. This follows in the footsteps of two Samurai loans for Afreximbank in 2017 and 2019, including the largest ever Samurai Loan for an African issuer.
Speaking on the transaction, Christopher Marks, Head of Emerging Markets EMEA, commented:
"This facility marks a watershed moment for African institutions looking to tap the Japanese investor pool, and we couldn't be more proud to have played a leading role.
"It goes without saying that we are delighted to have once again partnered with Afreximbank, who are not only leading the way in terms of bringing in new investment and growth opportunities to Africa, but also providing vital support to the region in the face of the COVID-19 pandemic."
Amr Kamel, Afreximbank's Executive Vice President for Business Development and Corporate Banking, said:
"The successful implementation of this facility is a testimony to the great collaboration and innovative approach adopted by MUFG, NEXI and Afreximbank and demonstrates the power of using public resources to leverage private financing for development.
"We expect strong and sustainable development outcomes by effective implementation of this facility, including employment creation, increased economic activities, and increase in tax revenues for fiscally strained governments, amongst other outcomes."
MUFG is committed to Africa's development and deploying capital market and debt platforms, innovative solutions and the power of our global network to support our clients' growth ambitions. The successful closing of this transaction is the latest milestone in MUFG's long term relationship with Afreximbank. As an organisation, MUFG will continue to work to deepen the strategic relationship between Africa and Japan.
MUFG's presence in Africa dates back more than 90 years to 1926, when Yokohama Specie Bank, a forerunner of MUFG, opened an office in Egypt. Today MUFG has offices in Cairo, Egypt, and Johannesburg, South Africa.