CRDB SECURES USD 150 MILLION SYNDICATED FACILITY

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.

CRDB Bank has secured an international syndicated facility of 150 million US Dollars (375bn/-) to mainly advance to large investors and SME's in various sectors of the economy.

The lender, one of the largest in the country, secured the loan from Italian International Banking Group, Intesa Sanpaolo Bank and South Africa's Investec Bank which syndicated to complete the process. The syndication attracted several players.

CRDB Group CEO and Managing Director, Abdulmajid Nsekela said the lender sought to raise 50 million US Dollars from the international market but the response was overwhelming. There was a 404 per cent  oversubscription, equaling to 202 million US Dollars.

"The bank received an overwhelming response from international lenders to demonstrate their confidence in us, based on our good business operation system and the country's stable economy", Mr. Nsekela said during the signing ceremony in Dar es Salaam.

However, CRDB only took 150 million US Dollars, which the lender planned to raise for the purpose of lending to strategic investors.

"We planned that if there is an oversubscription, we will take three times the amount we asked for", he said.

For CRDB to get the international loan, several factors were taken into consideration including creditworthiness, stability of the bank's management, commercial operations and also assessment of the strength and stability based on Moody's B1 stable outlook.

"In an international syndicated facility system, an institution like CRDB Bank that needs to raise funds submits an application to an international financial organisation and conveys it to different investors who would like to invest in Africa", the CRDB Bank Chief said.

Then each investor carries out a self-assessment of the applicant that requested the loan based on various international criteria.

"This is a significant transaction for CRDB Bank, a vote of confidence in our business model", Mr. Nsekela said.

The transacton 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 as well as the Middle East.

Leanne Large, Head of Loan Distribution and Syndication at Investec Bank said; "The level of oversubscription and participation by a broad group of investors reflects a growing appreciation of CRDB Bank's strong credit profile and its leading market position in Tanzania."

Gustaaf Eerenstein, Syndications Director at Intesa Sanpaolo said the oversubscription served  as a testament to the quality of management of CRDB Bank in successfuly concluding another landmark syndicated loan, particularly in the current volatile environment.

Marc Kohne, Head of Africa Structured Debt Solutions at Investec Bank said 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 US Dollar liquidity, the group of lenders were able to look beyond this, recognising CRDB Bank's qualities as well as Tanzania's growth potential," said the Head of Structured Debt Solutions.

Rowan King, Head of Africa Business Development at Investec Bank says the transaction demonstrates the growing relationship between Investec and CRDB Bank.

"CRDB Bank is a key partner for us in East Africa and we are continuously looking for opportunities  to collaborate for the benefit of clients of both banks," he said.

The funds raised will continue to be used to improve CRDB Bank's capital position and unlock working capital to support the bank's lending portfolio for the Corporate and SME sectors in Tanzania and Burundi.