Major syndication deal outside of public sector with Investec and Intesa Sanpaolo as joint lead arrangers
Investec Bank, together with Intesa Sanpaolo, have successfully raised US$130m for CRDB Bank, Tanzania’s largest bank, in the form of a syndicated term loan facility. The capital raised will be used to unlock working capital for the corporate and SME sector in the East African country, including project and infrastructure finance linked to the commodity sector.
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. In fact, CRDB Bank becomes the first bank in the country to have pulled a successful deal of raising fund from international markets.
“We are very excited to have closed this agreement. The raised funds from international market will improve the bank’s overall capitalisation and support our lending portfolio to corporate and SME sector in Tanzania and Burundi. I would like to thank Investec Bank and Intesa for their support,” said Abdulmajid Nsekela, CRDB Bank Group and CEO.
According to Nsekela, the target was to raise US$50m, but the bank’s strong performance attracted many international investors, resulting in a total of $130 million raised.
CRDB Bank is the first bank in Tanzania to be rated amongst the top ten stable and safer to invest in African 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.
Rowan King, Head of Africa Structured Debt Solutions at Investec Bank, says the transaction is a vote of confidence by global financial institutions in CRDB and the Tanzania economy. “Tanzania has proved to be crucial part of the African growth story over the last few years. Many of the key commodities produced in East, Southern and Central Africa are exported through Tanzanian ports, and in the light of 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’s creditworthiness, which, coupled with a broad spread of investors in the facility, demonstrates a healthy interest in the placement,” says Large.
Established in 1996, CRDB is an integrated financial services provider and the largest bank in Tanzania, with an asset base of TZS 8.8trillion (c.US$3.8bn as at December 2021). It is active in the corporate, retail, business, treasury, premier, and wholesale microfinance.
Intesa Sanpaolo’s Gustaaf Eerenstein comments: “The overwhelming success of the transaction, attaining a 150% oversubscription, is a testament to the management and people of CRDB Bank. This transaction bodes well for CRDB to further diversify its funding base, and to be able to successfully tap international markets.”
“As a leading Bank in Tanzania, CRDB Bank 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,” concludes Nsekela.