Africa: Infrastructure Lender AFC Eyes $500m Emerging Market Securitization

20 January 2025
Daba Finance (Abidjan)
  • Africa Finance Corporation (AFC) is planning a transaction involving at least $500 million in synthetic asset-backed securities
  • Synthetic ABS allows lenders to transfer loan-loss risks to investors, such as pension and hedge funds, via credit-linked notes
  • The corporation recently priced a $500 million perpetual hybrid bond and plans to enter the panda bond market

Africa Finance Corporation (AFC) is planning a transaction involving at least $500 million in synthetic asset-backed securities (ABS), according to Banji Fehintola, AFC's head of financial services and executive board member.

Synthetic ABS allows lenders to transfer loan-loss risks to investors, such as pension and hedge funds, via credit-linked notes while keeping the underlying assets on their books.

The deal is part of AFC's broader push to diversify funding sources and enhance lending capacity for large-scale infrastructure projects. The corporation recently priced a $500 million perpetual hybrid bond and plans to enter the panda bond market for renminbi-denominated debt.

You can follow Daba's reporting on Africa on WhatsApp. Sign up here

Key Takeaways

Synthetic ABS aligns with G20 recommendations to increase securitization to address financial challenges in emerging markets. AFC is also exploring cash asset-backed securities, Fehintola said.AFC aims to become a regular debt issuer in Chinese currency, complementing its existing dollar and yen issuances. The corporation is backing major infrastructure projects, including the Xlinks Morocco-UK renewable energy initiative and a US-supported railway linking Zambia's mining region to Angola's Lobito port. These projects will involve syndication with a consortium of banks.

Read the original article on Daba Finance.

Tagged:
Copyright © 2025 Daba Finance. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 500 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.