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FCMB gets $300m from DFIs, others

By on October 29, 2014

First City Monument Bank Limited has secured over $300m medium and long term funding from Development Finance Institutions and international commercial banks in four different transactions.

The bank said on Monday that the proceeds of the facility would be used for general lending purpose to key sectors of the Nigerian economy, branch development as well as channel enhancement.

The International Finance Corporation, a member of the World Bank Group; Citibank and Overseas Private Investment Corporation, a multilateral finance institution owned by the United States government, provided the loans.

Other DFIs are Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV – the Dutch Development Bank; Société De Promotion Et De Participation Pour La Coopération Economique SA, a subsidiary of the Agence Française de Développement, and the European Investment Bank, a multilateral finance institution owned by the European Union.

Going by the details of the loans, FCMB secured $100m senior debt financing from the IFC for a tenor of five years, another $100m from OPIC and Citibank for between two to five years tenor; $60m from FMO and PROPARCO for tenor between three to five years and $32.7m from the EIB for tenor of eight years.

The Group Managing Director and Chief Executive of FCMB, Mr. Ladi Balogun, said, ‘’The successful fund raising exercise with the number of international institutions that participated in the provision of the facilities is a demonstration of the level of confidence which investors and the international financial market have in FCMB and the Nigerian financial market as a whole.

“We are excited about this development as it shows that the financial institutions truly believe in the growth potential of FCMB, the excellent corporate governance structures and culture we have put in place.”

Balogun added that a large part of the facility would be used to support critical areas of the Nigerian economy, ‘’in line with our commitment to always provide veritable source of funding for the businesses of our customers, while also adding value to our shareholders.”

According to the bank, the facility from Citibank/OPIC, IFC, FMO/PROPARCO will provide lending to telecommunications, power and infrastructure projects.

In addition, FCMB would utilise a portion of the loan from Citibank/OPIC to finance Small and Medium-scale Enterprises and other activities that would enhance financial inclusion in Nigeria, it said.

It also said the $32.7m provided by EIB would be dedicated to channel expansion purposes.

FCMB had earlier this year considered raising $300m from the Eurobond markets, but the bank said the plan was suspended due to unfavourable market terms, noting that the average interest rate on the DFI facilities was about foour per cent below the Eurobond’s rate.

‘’We have continued to witness improved earnings growth, a strong balance sheet and credit standing. As we look into the future, we remain committed to delivering improved financial performance and enhance shareholder value sustainably,’’ Balogun said.

 

[Punch]