Afreximbank Prices Debut Samurai Bonds, Raises JPY81.3 billion
African Export-Import Bank (Afreximbank) has successfully priced its debut Samurai bond, securing a regular 5 tranche JPY 67.2 billion consisting of 2-year, 3-year, 5-year, 7-year, and 10-year fixed rate tranches.
Concurrently, the Bank launched its inaugural Retail Samurai bond with a 3-year fixed-rated tranche valued at JPY 14.1 billion. The bonds are rated ‘A-‘ by Japan Credit Rating Agency, Ltd. SMBC Nikko Securities Inc. as the sole lead manager for the transaction.
According to Afreximbank, debut bond transaction represents the first Samurai bond offering by an African-based Multilateral Development Bank (“MDB”) paving the way for other issuers in the region to access the Japanese bond market including a regular Samurai market and also Japanese Samurai retail market.
It also marks the first standalone credit Samurai bond issuance by an issuer from the Africa region since the 2008 global financial crisis.
With this transaction, Afreximbank said it has attracted close to 150 orders (excluding Retail Samurai), which is a significantly larger number compared to other debut transactions ever.
It noted that the primary goal of the transaction was to diversify Afreximbank’s investor base and markets, an objective that was successfully achieved.
Afreximbank successfully met its objective of achieving a benchmark transaction size of over JPY 30 billion and maximizing the size in longer tenors (up to 10 years).
Typically, debut issuers in the Japanese market often see demand centered on shorter tenors, such as 2-year bonds. In addition, the Retail Samurai bond that Afreximbank concurrently priced is the first Retail Samurai bond from the region.
Commenting on the transaction, Chandi Mwenebungu, Afreximbank’s Managing Director Treasury & Markets and Group Treasurer noted: “We are very pleased to have further diversified our financing resources and are excited to work with Japan and the Japanese investors.
“Since 2010, Afreximbank has established relationships with JBIC, NEXI and JICA, among others, and has maintained a strong relationship with other Japanese institutions.
“We have been in the Samurai loan market since 2017 and this time we are very happy to extend our footprints to the Samurai bond market as well. We are very committed to the Samurai market, and we will continue to engage in regular investor activities every year to further expand our relationship in this market.”
Prior to the transaction, Afreximbank conducted physical Samurai bond investor meetings in Tokyo in November 2023, September 2024 and virtual meetings in November 2024.
The Bank said these roadshows provided investors with a comprehensive understanding of Afreximbank’s overview, operating environment and public policy mandate. They also highlighted the Bank’s key privileges, such as preferred creditor treatment and immunities which are vital to fulfilling its mandate. The investor engagements culminated in the pricing of the Bank’s groundbreaking public format Samurai transaction on 14th November 2024.
The transaction attracted interest and orders from central institutional investors in Tokyo, and regional and small types of investors across Japan, alongside some interest from non-Japanese investors.
To engage the Japanese regional investor base, Afreximbank secured a bond credit rating from Japan Credit Rating Agency, Ltd. As a result, the Bank successfully raised JPY 62.2 billion (excluding the retail tranche) and attracted close to 150 orders. The bonds were placed across a wide spectrum of investors.
The distribution statistics of the Transaction across the tenors resulted in the following allocation – Asset Managers (34%), Other accounts across the country (21%), Regional banks (18%), Offshore accounts (16%), Life insurers (6%), and Central cooperatives (5%).
Meanwhile, in parallel to the regular Samurai transaction that targeted primarily institutional investors, Afreximbank priced a JPY14.1 billion Retail Samurai bond on the same date of 14 November 2024 with the same condition as the regular 3-year Samurai bonds (with a different closing date on 29 November 2024). FG Earmarks N47.5bn for Upgrade of 50 Selected Schools
