Afreximbank Launches First Samurai Bonds, Raising JPY 81.3 Billion

The African Export-Import Bank (Afreximbank) has successfully issued its debut Samurai bond, raising JPY 67.2 billion across five fixed-rate tranches with maturities of 2, 3, 5, 7, and 10 years. Alongside the offering, Afreximbank also introduced its first Retail Samurai bond, a 3-year fixed-rate tranche valued at JPY 14.1 billion. The bonds hold an ‘A-’ rating from Japan Credit Rating Agency, Ltd., with SMBC Nikko Securities Inc. acting as the sole lead manager.

Afreximbank's debut in the Samurai bond market is the first of its kind by an African-based Multilateral Development Bank (MDB) and sets a precedent for other African issuers aiming to tap into Japan’s bond markets, both institutional and retail. Notably, it also represents the first standalone Samurai bond issuance from Africa since the 2008 financial crisis.

The issuance garnered close to 150 investor orders (excluding the Retail Samurai tranche), marking a robust demand in the Japanese market, where new issuers typically face shorter-term demand. Afreximbank’s objective to diversify its investor base and achieve a benchmark transaction exceeding JPY 30 billion was successfully realized, especially with significant interest in longer tenors up to 10 years.

The bank’s retail bond, valued at JPY 14.1 billion, also made history as the first Retail Samurai bond from Africa, further broadening Afreximbank’s reach within Japan’s investment landscape.

Commenting on the transaction, Chandi Mwenebungu, Afreximbank’s Managing Director Treasury & Markets and Group Treasurer noted: “We are very pleased to have further diversified our financing resources and are excited to work with Japan and the Japanese investors.

“Since 2010, Afreximbank has established relationships with JBIC, NEXI and JICA, among others, and has maintained a strong relationship with other Japanese institutions.

“We have been in the Samurai loan market since 2017 and this time we are very happy to extend our footprints to the Samurai bond market as well. We are very committed to the Samurai market, and we will continue to engage in regular investor activities every year to further expand our relationship in this market.”

Prior to the transaction, Afreximbank conducted physical Samurai bond investor meetings in Tokyo in November 2023, September 2024 and virtual meetings in November 2024.

The Bank said these roadshows provided investors with a comprehensive understanding of Afreximbank’s overview, operating environment and public policy mandate. They also highlighted the Bank’s key privileges, such as preferred creditor treatment and immunities which are vital to fulfilling its mandate. The investor engagements culminated in the pricing of the Bank’s groundbreaking public format Samurai transaction on 14th November 2024.

The transaction attracted interest and orders from central institutional investors in Tokyo, and regional and small types of investors across Japan, alongside some interest from non-Japanese investors.

To engage the Japanese regional investor base, Afreximbank secured a bond credit rating from Japan Credit Rating Agency, Ltd. As a result, the Bank successfully raised JPY 62.2 billion (excluding the retail tranche) and attracted close to 150 orders. The bonds were placed across a wide spectrum of investors.

The distribution statistics of the Transaction across the tenors resulted in the following allocation – Asset Managers (34%), Other accounts across the country (21%), Regional banks (18%), Offshore accounts (16%), Life insurers (6%), and Central cooperatives (5%).

Meanwhile, in parallel to the regular Samurai transaction that targeted primarily institutional investors, Afreximbank priced a JPY14.1 billion Retail Samurai bond on the same date of 14 November 2024 with the same condition as the regular 3-year Samurai bonds (with a different closing date on 29 November 2024).