Business and Technology Reporter in Nairobi, Kenya
Nation Media Group
The African Export-Import Bank (Afreximbank) has raised $523 million (¥81.3 billion) in its inaugural issue of a Samurai bond, making it one of the only few African institutions to raise funds in the unique Japanese market.
A Samurai bond is a Japanese yen-denominated facility aimed primarily at individual and institutional investors in the Asian powerhouse, and provides a means of raising funds in Japan capital markets.
Afreximbank’s Samurai bond is the first by a multilateral bank in Africa since 2008, and its success is seen as a significant milestone on the continent, paving the way for other sovereign and non-sovereign issuers to take a similar route.
“We are very pleased to have further diversified our financing resources and are excited to work with Japan and the Japanese investors,” said Afreximbank’s managing director Chandi Mwenebungu.
“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.”
The bond is in five tranches of two, three, five, seven and 10 years fixed rate, alongside a $90.6 million (¥14.1 billion) three-year fixed rate retail Samurai bond.
According to the bank, the institutional Samurai transaction attracted almost 150 orders, which is higher than any other debut Samurai transaction issued by African institutions.
Afreximbank has conducted several physical investor engagement sessions since November last year, which, the lender said, “provided investors with a comprehensive understanding of Afreximbank’s overview, operating environment and public policy mandate.”
Apart from Afreximbank, the African Development Bank (AfDB) is the only other multilateral development bank on the continent to have successfully issued a Samurai bond.
Other Samurai bonds on the continent have been issued by sovereigns, including Egypt, Ghana, South Africa, Tunisia, and Morocco.
Currently, Kenya and Nigeria are also considering a Samurai bond to diversify funding sources as yields in the Eurobond market have hit record levels, making it expensive to access funding from the markets.
Kenya is also exploring other types of bonds, such as Shariah-compliant sukuk and a facility from the United Arab Emirates, to access cheap debt on favourable terms.
