The African Export-Import Bank (Afreximbank) on Friday announced the disbursement of an initial $2.25 billion which is part of a syndicated $3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL).
A statement from Afreximbank indicated that a second tranche of $1.05 billion is expected to be disbursed subsequently.
The statement read in part, “Investors were keen to consider ticket sizes of $250 million and $500 million amidst current headwinds and year-end pressures in the loan markets. The 5-year facility carries a margin of 6.0% per annum above the 3-month secured overnight financing rate (SOFR).
“The transaction structure has an embedded price balance mechanism where 90% of all excess cash from the sale of the committed barrels (after debt service) will be released while the balance of 10% will be used to prepay the facility, effectively shortening the final maturity of the facility and freeing cash flow from future pledged cargoes for use by Nigeria.”
While lauding the successful financial close, Afreximbank president and chairman of the Board of Directors, Prof. Benedict Oramah, said “this facility further demonstrates the Bank’s commitment to supporting African economies when such assistance is most needed. Afreximbank stands by its member countries in good and in difficult times.”
He said, “The disbursement of the initial $ 2.25 billion under the facility will support Nigeria’s long-term economic stability, ease access to import financing for raw materials and essential goods, support industrialisation and trade development efforts.”
In his remarks, the NNPCL Group Chief Executive Officer, Mr. Mele Kolo Kyari, said “the proceeds of the facility have been made available to the Federal Republic of Nigeria as one of several efforts towards improving macro-economic stability.”
