Africa Finance Corporation (AFC) today announced the closure of its introductory $140,000,000 Kimchi Term Loan Facility. This is the company’s first loan instrument specially designed for the Korean market.
The successful closing of the Kimchi Loan Facility and all other Asian investment schemes of the corporation demonstrates its success in engaging with global investors. This is a significant step towards building a broad investor base so that the funds can be diversified into various segments, along with encouraging international institutions to invest in the development of Africa. Profit generated from the Kimchi Term Loan Facility will be utilized for running the establishment in accord with AFC’s Establishment Agreement and the Charter.
AFC was very similar to its other such loan schemes, such as $233M and JPY1 billion dual currency Samurai Term Loan Facility, which ended in September 2019, and a $300M Loan Facility in collaboration with the Export-Import Bank of China. These schemes are in addition to the purchase of 28% and 16% of Corporation’s $500M and $650M Eurobond issuances by Asian investors, respectively, this year. The recent cumulative investments accumulated from Asian countries: China, Hong Kong SAR, Singapore, Malaysia, and Taiwan by AFC are equivalent to around $1.2 billion.
President and CEO of AFC, Samaila Zubairu, in a statement said that,
“We are very pleased to have achieved this historic milestone with the South Korean debt markets, which we know to have highly selective investment criteria, as was evidenced through this Kimchi Loan Facility. The success, close on the heels of the Samurai Loan Facility in Japan, signifies the East’s growing appetite for African investments, which are particularly attractive considering today’s negative-yield environment. We look forward to continued engagement with South Korea as well as the other Asian markets that understand the opportunity that is available through Africa’s unprecedented development.”
In 2007, AFC was established with an equity investment of $1 billion. The main aim of the corporation was to act as a promoter for private sector infrastructure investment in Africa. AFC is the second largest investment grade rated multilateral financial institution, which has achieved A3/P2 (Stable outlook) status from the world’s most trusted credit ranking organization, Moody’s Investors Service. At present, its balance sheet shows a transaction of approximately $5.07 billion.