CRDB Bank, one of the largest lenders in the country, has secured 130 million US dollars (300bn/-) following a syndicated term loan facility organised by Investec and Intesa Sanpaolo as joint lead arrangers.
The capital raised will be used to unlock working capital for the corporate and SME sector in the second largest economy in East Africa, including project and infrastructure finance linked to the commodity sector.
CRDB Group CEO and Managing Director Mr Abdulmajid Nsekela said they were targeting to raise 50 million US dollars (115bn/-), but the bank’s strong performance attracted many international investors to push the amount to 130 million US dollars.
“We are very excited to have closed this agreement,” Mr Nsekela said adding “the raised funds from the international market will improve the bank’s overall capitalisation and support our lending portfolio to corporate and SME sector in Tanzania and Burundi.”
CRDB, commanding mortgage business and with the widest branch network, becomes the first bank in the country to have pulled a successful deal of raising fund from the international market.
“As a leading Bank in Tanzania, CRDB continues to explore business opportunities in strategic sectors that will bring the much-needed development to boost the country’s economy. This fund will help us boost our lending activities and further strengthen our leadership position,” Mr Nsekela said.
Intesa and Investec were joint coordinators and book runners for the transaction with Investec also acting as the facility agent for this maiden syndicated loan deal in Tanzania outside of the government and public sector.
Rowan King, Head of Africa Structured Debt Solutions at Investec Bank, said the transaction was a vote of confidence by global financial institutions in CRDB and the Tanzania economy.
“Tanzania has proved to be a crucial part of the African growth story over the last few years,” Mr King said.
He said the country is crucial since many of the key commodities produced in East, Southern and Central Africa are exported through Tanzanian ports, and in the light of the demand for the key commodities that Africa produces, the country is playing an ever more important role in inter-African trade – opening the region to Middle Eastern and Asian markets from both an import and export perspective.
The $130m raised was two-and-a-half times the launch amount, points out Leanne Large, Head of Loan Distribution and Syndication at Investec Bank:
“This indicates a high degree of comfort in CRDB Bank’s creditworthiness, which, coupled with a broad spread of investors in the facility, demonstrates a healthy interest in the placement.” Mr Large.
Intesa Sanpaolo’s Gustaaf Eerenstein said the overwhelming success of the transaction, attaining a 150per cent oversubscription, is a testament to the management and people of CRDB.
“This transaction bodes well for CRDB to further diversify its funding base, and to be able to successfully tap international markets,” Mr Eerenstein said.
CRDB is the first bank in Tanzania to be rated among the top ten stables and safer to invest in Africa by Moody`s Investors Services. Moody`s rated CRDB Bank with a “B1 stable outlook” which is the highest rating to have been acquired by financial institutions in Sub-Saharan Africa.