Toba Owojaiye
Benin City, Edo State
Afreximbank has successfully facilitated a historic US$3.3 billion crude oil prepayment facility for the Nigerian National Petroleum Company Limited (NNPCL), marking the largest syndicated loan ever raised by Nigeria in the global market and one of Africa’s most substantial debts in recent years.
The initial disbursement of US$2.25 billion, amid year-end financial closures, demonstrates confidence in Nigeria. This financing is crucial for Nigeria’s macroeconomic stability and long-term economic growth.
Truth Live News gathered that the 5-year facility, with a 6.0% per annum margin above the 3-month secured overnight financing rate (SOFR), includes a unique price balance mechanism. Ninety percent of excess cash from committed barrel sales will be released after debt service, while the remaining 10% will prepay the facility, shortening its maturity. Afreximbank, Gunvor International BV, and Sahara Energy Resources Limited are the initial lenders, showcasing investor interest amidst market challenges.
Afreximbank’s role as the Sole Mandated Lead Arranger and various other positions, alongside UBA as the Local Arranger, highlights their expertise. Prof. Benedict Oramah, Afreximbank’s President, emphasized the bank’s commitment to supporting African economies, praising partners and investors for swift fundraising.
The NNPCL CEO, Mr. Mele Kolo Kyari, highlighted the facility’s contribution to Nigeria’s macroeconomic stability, and UBA’s CEO, Oliver Alawuba, expressed delight in participating, underscoring the bank’s dedication to addressing economic issues in Nigeria. This landmark transaction signifies solid market confidence in Nigeria and reaffirms the importance of global collaboration in fostering economic development.