RMBconcludedBOI’sEUR1.0-bnsyndicatedtermloan

 

The challenge

BOI’s developmental mandate is guided by Nigeria’s Economic Recovery and Growth Plan (ERGP) and the Nigeria Industrial Revolution Plan (NIRP). These plans support projects with potential developmental impact and the capability to generate considerable multiplier effects such as job creation, import substitution and poverty alleviation to positively impact the socio-economic condition of Nigerians.

BOI strives to achieve this mandate by offering long-term loans at concessionary rates to micro, small, medium and large scale enterprises in the manufacturing and industrial sectors. Key for BOI was to diversify its funding sources, lengthen its funding tenors, reduce its funding costs and build new relationships with key investors in the international loan markets.

RMB’s relationship with BOI started in 2018 with a USD75-m balance sheet commitment in BOI’s inaugural USD750-m syndication in the international loan markets. As a proven strategic partner, RMB was again mandated to assist BOI in raising this landmark syndicated term loan, alongside three other international banks.

The RMB solution

The five-year, amortising syndicated term loan facility was structured with an on-demand guarantee from the Central Bank of Nigeria, which made it more appealing to the investor market. The transaction was launched at an initial size of EUR750-m, but was upsized at closing to EUR1.0-bn due to the significant oversubscription received from the market.

RMB, as mandated lead arranger, bookrunner and joint underwriter was instrumental in delivering a successful transaction for the client during the unprecedented times brought about by the COVID-19 pandemic and the oil price decline. In total, 17 investors comprised of banks and funds joined the four funders in the transaction.

The RMB multijurisdictional team also upheld best execution practices throughout the fundraising process despite the challenging market conditions.

Proven results

The innovative structuring of the transaction, including the guarantee from the Central Bank of Nigeria, and the joint underwrite of the three other funders gave BOI assurance of the funding before the primary syndication was launched.

BOI was also able to achieve tighter pricing and longer tenured financing from a diverse investor pool in the midst of the global market volatility brought about by COVID-19 and the oil price decline in March 2020. This will go a long way to ensure that the BOI can deliver on its mandate to kickstart the industrial and manufacturing sector in Nigeria by providing long-term loans at single digit interest rates.

Client	Bank of Industry Limited
Deal value	Euro 1.0-bn
Sector	Financial Services
Capabilities	Loan origination, structuring, arranging and distribution
RMB's role	Mandated lead arranger, bookrunner and joint underwriter
Country	Nigeria