$2.25 Billion doled by Afreximbank as disbursement under the auspices of a tailored $3.3 billion Crude Oil prepayment Facility Subsidized by the Nigerian National Petroleum Company Limited
By Abdul Rahman Bangura-
NEW AFRICA BUSINESS NEWS (NABN) Freetown, Sierra Leone- As development of this unfolds, the United Bank for Africa Plc (UBA) played a very critical role as the Local Arranger and Onshore Account Bank for the transaction, which is anticipated to relieve the foreign exchange illiquidity and maintain the Nigerian currency market.
This development financing is Nigeria’s largest crude oil prepayment facility and one of the largest syndicated loans seen in Africa in 2023. The 5-year facility embodies a margin of 6.0% per annum above the 3-month secured overnight financing rate (SOFR). The transaction structure has an embedded price balance mechanism where 90% of all excess cash from the sale of the committed barrels (after debt service) will be unleased to the borrower, while the balance of 10% will be wielded to prepay the facility, effectively shortening the final maturity of the facility and freeing cash flow from future pledged cargoes for use by Nigeria.
The primary participating lenders are Afreximbank, Africa’s multilateral trade finance institution, Gunvor International BV, a Geneva-based multinational energy and commodities trading company and Sahara Energy Resources Limited, an African-owned, leading international energy and infrastructure conglomerate.
For New Africa Business News (NABN) Abdul Rahman Bangura Reports, Africa Correspondent