Afreximbank Raises US$1.5 Billion, Its Largest Bond Yet

EGYPT · FINANCE

The Afreximbank bond that priced on 28 July raised US$1.5 billion across two tranches, the largest issue in the Cairo-based lender’s history and its first public dollar deal since 2021. Orders peaked at US$3.8 billion, which let it cut pricing by 37.5 basis points — a market verdict on an argument the bank had been losing on paper.

What the Afreximbank bond priced at

The structure was conventional and the execution was not. Two equal tranches of US$750 million went out, one maturing in January 2032 and one in July 2036, landing at yields of 6.25 and 7.125 percent.

The order book peaked at US$3.8 billion, two and a half times the amount issued, with demand split evenly across both legs. The bank calls that about twice oversubscribed, and it was enough to tighten pricing by 37.5 basis points on each tranche.

“This successful issuance shows the confidence that investors continue to place in Afreximbank and in Africa’s growth story,” said Chandi Mwenebungu, the bank’s managing director for treasury and markets and group treasurer.

Buyers came from Britain, continental Europe, Asia and the United States. HSBC ran the deal as global co-ordinator, with Standard Bank of South Africa, Standard Chartered, Commerzbank and MUFG Securities as joint lead managers and bookrunners.

The argument the bank had with its rating agency

This was not a routine return to the market. In June 2025 Fitch cut Afreximbank to BBB-, one notch above junk, with a negative outlook, and reassessed its credit risk as high.

The grounds were specific. Fitch pointed to non-performing sovereign loans of about US$750 million to Ghana and US$45 million to Zambia, plus exposure to Malawi and South Sudan, and argued the bad-loan ratio should be recorded at 7.1 percent rather than the roughly 2.4 percent the bank was reporting.

Behind the numbers sat a question of status. Afreximbank holds that its 1993 establishment agreement, signed by 53 African states, gives it preferred creditor status and puts its loans outside sovereign restructurings.

Debtor governments and other creditors took the opposite view. Because the loans carried higher rates than concessional finance, they argued, they should be treated as commercial facilities and included in the restructuring.

How that fight ended, and what it cost

In December the bank and Ghana announced an agreement in principle on the US$750 million loan, and the IMF said the deal was consistent with the comparability-of-treatment standard applied by Ghana’s official creditor committee. No terms were published.

Whether the bank took a loss is therefore not established. Agence Ecofin, citing people close to the official creditors, reported that it did; the verifiable point is that the outcome did not give it the exemption it had claimed.

Moody’s had already cut it to Baa2 in July 2025, citing weaker-than-expected asset performance and a less diversified funding base, with the move into unsecured lending to stressed sovereigns among the contributing factors. In January the bank terminated its relationship with Fitch, saying the agency’s exercise no longer reflected a good understanding of its mandate.

Five days later Fitch cut the rating to BB+, below investment grade, then withdrew its ratings for commercial reasons. The market noticed: the bank’s 2031 bonds fell and their yield rose to about 6.3 percent.

Then in mid-June, S&P rated the bank for the first time in nearly twelve years, assigning BBB+ with a stable outlook and citing its growing strategic importance and its role as a countercyclical lender. That restoration of investment grade is the context for this bond, and the US$3.8 billion order book is the clearest answer investors have given.

What the balance sheet looks like

At the end of 2025 assets and contingencies stood above US$48.5 billion, with shareholder funds of US$8.4 billion. S&P, measuring assets alone, put them at US$42.3 billion, up from US$7.1 billion a decade earlier.

A US$6.5 billion general capital increase approved in 2021 has run ahead of schedule, with the subscription target reached about a year early. The bank says it has never posted an annual loss since it began operating.

The unresolved risk is concentration. Japan Credit Rating Agency has noted that more than 70 percent of the portfolio sits in five countries — Nigeria, Egypt, Zimbabwe, Tunisia and Angola — and Zambia’s restructuring is still capable of turning the Ghanaian outcome into a pattern.

Where the money goes

The proceeds are earmarked for trade finance, industrialisation and investment that supports growth, including intra-African trade. The bank disbursed US$17.5 billion in trade financing in 2024 and has targeted US$40 billion by 2026.

Its most visible piece of plumbing is PAPSS, the settlement system adopted by the African Union for the continental free trade area. It now links 28 countries, more than 190 banks and fintechs and 16 payment switches.

It also runs a US$10 billion adjustment fund with the trade area’s secretariat. In March it launched a US$10 billion Gulf Crisis Response Programme to cushion African and Caribbean economies against shocks from the conflict in the Middle East.

The Caribbean arm that makes this a Latin America story

Under a framework it calls Global Africa, the bank lends outside the continent to countries with historical and ancestral ties to it. In practice that means the Caribbean.

In February its president, George Elombi, told the fiftieth meeting of CARICOM heads of government in St Kitts and Nevis that the regional financing ceiling was rising from US$3 billion to US$5 billion. He said the bank hoped to use the full amount within three to four years.

Thirteen CARICOM states have acceded to its establishment agreement, Jamaica most recently, which lets the bank lend directly to those governments. More than US$750 million has already gone out, into climate adaptation in Saint Lucia, sports infrastructure and tourism in Barbados, small-business lending in the Bahamas, tourism in Grenada and oil and gas in Suriname.

That last name is the bridge to South America. Suriname sits on the mainland and borders Brazil, which makes an African trade bank a lender on this continent as well as its own.

The reason for the push is a single statistic. Trade between Africa and the Caribbean amounts to less than one percent of the two regions’ total exports.

The programme is not friction-free. The bank’s fifth AfriCaribbean trade and investment forum, due to run in Basseterre from 29 to 31 July, was deferred in early July over what the bank and the host government called an evolving public health situation in parts of Africa.

What to watch

The immediate test is Zambia. If the bank settles there as it did on Ghana, the preferred-creditor argument weakens regardless of what the order book says.

The second is whether the capital increase is fully paid in, since it underpins both the ratings and the lending targets. The third is the Caribbean book, which is where the bank is taking the most unfamiliar risk.

More: Egypt news in English, every day from The Rio Times.

Frequently Asked Questions

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.