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Africa

Tapping into the MENA corridor, CFC Stanbic secures loan

CFC Stanbic Bank Kenya received a loan from a number of banks including Middle Eastern lenders as they search for new areas of liquidity.

Apr 6, 2016 // 8:05AM

CFC Stanbic Bank Kenya, an affiliate of Standard Bank, has received a US$135mn dual tranche loan facility. The loan was oversubscribed by US$100mn.

Proceeds of the loan will be used for general corporate purposes including trade related financing.

Emirates NBD and Mashreqbank were mandated as initial lead arrangers and bookrunners on the deal. Other lead arrangers included Al Ahli Bank of Kuwait, United Arab Bank, Bank Muscat, Commerzbank Aktiengesellschaft, Filiale Luxembourg, SBM Bank, Investec Bank and AfrAsia Bank. Al Khaliji France and the Federated Project and Trade Finance Core Fund participated as arrangers.

The economies of East Africa have proved more resilient to the commodity price slump.

“Kenya, despite threats to certain investment ventures, such as tourism infrastructure as a result of terrorism, bank financing remains popular,” said Constantin Von Moltke, Head of Syndication and Co-Financing at the African Development Bank.

A significant portion of banks involved on the deal were from the Middle East. A source speaking to Bonds & Loans said that the increased participation of Arab banks in African deals was the result of liquidity drying up in the Middle East. 

The source noted that South Africa banks are in especially high demand amongst Middle Eastern lenders in the African FI, direct foreign investment and supranational space.

Even subsidiaries of South African banks operating in different albeit still relatively strong economies are popular, the source added..

Von Moltke noted that new entrants to the continent, such as Middle Eastern lenders, will be a bit more conservative and reserve their activity only to Africa’s most stable economies.

“Providing funds to entities in stable countries allows the lender to remain visibly in play in the financial institution market without exposing themselves to volatile economies,” he added.

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