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FUNDING

Absa Bank secures $500 million Term Loan Facility

In Summary

•This is the first syndicated loan Absa Bank has concluded in more than a decade.

Barclays Bank Queensway House along Mama Ngina street in Nairobi.
Barclays Bank Queensway House along Mama Ngina street in Nairobi.

Absa Bank Limited, Bank of America Merrill Lynch and Standard Chartered Bank have announce the signing and successful closing of a $ 500 million (Sh51.15 billion) term loan facility.

The Facility has an initial tenor of two years, subject to an extension option available at the borrower’s discretion to extend the maturity by a further one-year at the end of the initial two-year tenor.

Absa Group Ltd. financial director Jason Quinn said the syndicated loan which follows the lender’s $400 million (Sh40.92 billion) tier two bond issuance will be used to fund the growth of Absa’s US dollar lending both in South Africa and its other regional operations.

The loan which pays a margin of 1.05 per cent annually was launched on May 29, to select financial institutions, at a launch amount of $300 million (Sh30.69 billion) subject to increase.

Absa subsequently elected to upsize the transaction to $500 million in light of the significant commitments received.

The response from the market was extremely strong, with more than 192 per cent over-subscription achieved versus the original launch amount with the final lender group consisting of 19 geographically diverse banks.

“This is the first syndicated loan Absa Bank has concluded in more than a decade and we are pleased with the result. I would also like to acknowledge our Coordinators and the key relationship banks that have participated in this $500 million syndicated loan,” Quinn said.