Intesa Sanpaolo and Investec Bank have successfully raised US$150m on behalf of CRDB Bank, Tanzania’s largest bank, in the form of a syndicated term loan facility. The transaction is a refinancing of the facility successfully raised on behalf of CRDB Bank last year.
The transaction achieved a number of landmarks, including the extension of the tenor on a portion of the loan amount (US$28m) to two years, with the balance over one year (US$122m).
The transaction also broadened the base of lenders, with funding coming from a geographically diverse group that included banks and institutions in South Africa, Italy, Mauritius, Egypt, Germany, the United Kingdom and the Middle East.
A leading development funding institution (DFI) also participated in the transaction, broadening the base of lenders/investors further.
The syndication was significantly oversubscribed, with commitments of US$202m, (404%) compared with the initial target of US$50m.
Intesa Sanpaolo and Investec were joint coordinators and book runners for the transaction with Mauritius Commercial Bank fulfilling the role of facility agent.
“This is a significant transaction for CRDB Bank, a vote of confidence in our business model, creditworthiness and the Tanzanian economy,” said CRDB’s spokesperson.
“This is a landmark tenor for a Sub-Saharan African commercial bank in terms of hard currency syndications.
“As with the successful initial transaction last year, which was also oversubscribed, the funds raised will continue to be used to improve our capital position and unlock working capital to support our lending portfolio to the corporate and SME sector in Tanzania and Burundi, including project and infrastructure finance linked to the commodity sector.”
“We were pleased to once again work with Intesa and Investec, both of whom have an excellent understanding of our business needs and were able to broaden the base of participants.”
CRDB Bank is the first bank in Tanzania to be rated by Moody’s Investors Services among the top 10 most stable and safe-to-invest-in African banks. Moody’s last year rated CRDB Bank with a “B1 stable outlook” which is the highest rating to have been acquired by financial institutions in sub-Saharan Africa.
Leanne Large, Head of Loan Distribution and Syndication at Investec Bank, notes: “The level of oversubscription and participation by a broad group of investors reflects a growing appreciation of CRDB’s strong credit profile of the bank and its leading market position in Tanzania.”
Gustaaf Eerenstein, Syndications Director at Intesa Sanpaolo commented: “This again serves as testament to the quality of the management and people of CRDB Bank in successfully concluding another landmark syndicated loan, particularly in the current volatile environment. We are proud to be associated with such a leading African institution.”
Marc Köhne, Head of Africa Structured Debt Solutions at Investec Bank, says the syndication comes at a time when many countries and businesses have found access to US dollar funding hard to come by.
“In this environment of constrained dollar liquidity, the group of lenders were able to look beyond this, recognising CRDB Bank’s qualities and Tanzania’s growth potential. Tanzania continues to play an important role in both inter-African trade and exports to the key Asian and Middle East markets.”
Rowan King, Head of Africa Business Development at Investec Bank, says the transaction demonstrates the growing relationship between Investec and CRDB Bank.
“CRDB Bank is a key partner for us in East Africa, and we are continuously looking for opportunities to collaborate to the benefit of clients of both banks,” he says.