The Bank of Industry has announced the successful conclusion of a landmark $1 billion loan syndication transaction, in a bid to improve its capacity to support MSMEs.
“According to Investopedia, Loan Syndication is the process of involving a group of lenders in funding various portions of a loan for a single borrower. Loan syndication most often occurs when a borrower requires an amount too large for a single lender to provide or when the loan is outside the scope of a lender’s risk exposure levels.”
This is according to a verified post on the website of the Bank of Industry, that the transaction is the third major international debt syndication deal successfully concluded by BOI within the last 3 years.
Prior to this deal, the bank had earlier in 2018 raised the sum of $750 million with the support of the African Export-Import Bank “Afreximbank”, this loan has been fully repaid.
In addition, in March 2020, the bank pulled off another €1 billion loan deal (Lead Arranged by Afreximbank, Credit Suisse, Rand Merchant Bank and Sumitomo Mitsui Banking Corporation Europe Limited (SMBC)).
Despite the challenges posed by the COVID-19 pandemic, Beadysworld learnt that the key factors which led to the success of the deal include; the impressive credit ratings of the bank, its ISO certifications in both Quality Management Systems and Information Security, as well as its strong strategic partnership with domestic commercial banks, evident by the continuous provisions of credit enhancements and de-risking tools to BOI customers.
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The Central Bank of Nigeria supported BOI by providing a full guarantee for the facility and a 100% currency swap to mitigate the foreign exchange rate risk.
Between 2015 and October 2020, the Bank of Industry with the support of its various stakeholders disbursed over ₦945 billion to 3,013,087 enterprises, thus creating over 6.87 million estimated direct and indirect jobs.