CRDB Bank acquires $150 million in syndicated loan for SMEs
CRDB Bank Plc board chairman, Dr Ally Laay (left), witnesses the signing of a $150 million syndicated loan arranged by Intesa Sanpaolo and Investec Bank in Dar es Salaam on October 17, 2023. From left is CRDB Bank managing director, Abdulmajid Nsekela, syndications at Intesa Sanpaolo, Gustaaf Eerenstein, and head of Africa business development at Investec Bank, Rowan King. PHOTO | COURTESY OF CRDB BANK PLC
What you need to know:
- CRDB Bank said the $150 million syndicated term loan will help improve its capital position and unlocking working capital
Dar es Salaam. CRDB Bank has acquired a $150 million (about Sh390 billion) syndicated term loan facility that will be spent on boosting its capital and support lending to Small and Medium Enterprises (SMEs).
“The funds raised will help to further improve our capital position and unlock working capital to support our lending portfolio to the corporate and SME sector in Tanzania and Burundi, including project and infrastructure finance linked to the commodity sector,” CRDB Bank said in a statement yesterday.
The syndicated loan has been arranged by Intesa Sanpaolo and Investec Bank while the Mauritius Commercial Bank fulfilled the role of facility agent. Intesa Sanpaolo is an Italian international banking group while Investec Bank is an Anglo-South African international banking and wealth management group.
CRDB Bank Plc said in the statement that the transaction allows an extension of the tenor on a portion of the loan amount of $28 million to two years, with the balance ($122 million) over one year.
“The transaction also broadened the base of lenders, with funding coming from a geographically diverse group that included banks and institutions in South Africa, Italy, Mauritius, Egypt, Germany, the United Kingdom and the Middle East,” CRDB Bank said.
It said the syndication was oversubscribed by 404 percent (by $202 million) against an initial target of $50 million.
“This is a significant transaction for CRDB Bank, a vote of confidence in our business model, creditworthiness and the Tanzanian economy….It is a landmark tenor for a Sub-Saharan African commercial bank in terms of hard currency syndications,” the statements reads, quoting CRDB Bank Plc managing director, Mr Abdulmajid Nsekela.
Last year, Moody’s Investors Services ranked CRDB Bank to be among the top 10 most stable and safe-to-invest-in banks in Africa. The lender was rated “B1 stable outlook” which is the highest rating to have been acquired by financial institutions in sub-Saharan Africa.
The head of loan distribution and syndication at Investec Bank, Leanne Large, said the level of oversubscription and participation by a broad group of investors reflects a growing appreciation of CRDB’s strong credit profile and its leading market position in Tanzania.
According to the syndications director at Intesa Sanpaolo, Gustaaf Eerenstein, the loan serves as testament to the quality of the management and people of CRDB Bank in successfully concluding another landmark syndicated loan even a volatile environment.
According to the head of Africa Structured Debt Solutions at Investec Bank Marc Köhne, the syndication comes at a time when many countries and businesses have found access to US dollar funding hard to come by.
“In this environment of constrained dollar liquidity, the group of lenders were able to look beyond this, recognising CRDB Bank’s qualities and Tanzania’s growth potential,” he said.
