FCMB secures $300 m long term facility from DFI, , others.

FCMB secures $300m term loan facility from DFI, others

First City Monument Bank (FCMB) Limited has
successfully secured over $300 million
medium and long term funding from
Development Finance Institutions (DFIs) and
international commercial Banks in four different
transactions. This follows an upgrade in the
rating of the Bank by Global Credit Rating
(GCR) to A- (that is, stable outlook).
The $300 million secured by FCMB from the
DFIs demonstrates the confidence the lenders
and the international financial market have in
the management capabilities of the Bank.
Proceeds of the facility will be used for general
lending purpose to key sectors of the Nigerian
economy, branch development as well as
channel enhancement.
The International Finance Corporation (IFC), a
member of the World Bank Group and the
largest global development institution; Citibank
and Overseas Private Investment Corporation
(OPIC), a multilateral finance institution owned
by the U.S government, provided the loan.
Other Development Finance Institutions (DFIs)
include Nederlandse Financierings-
Maatschappij voor Ontwikkelingslanden N.V.
(FMO) – the Dutch Development Bank; Société
De Promotion Et De Participation Pour La
Coopération Economique S.A (PROPARCO), a
subsidiary of the Agence Française de
Développement (AFD), and the European
Investment Bank (EIB), a multilateral finance
institution owned by the European Union.
Going by the details of the loans, FCMB
secured $100 million senior debt financing
from the IFC for a tenor of 5 years, another
$100 million from OPIC and Citibank for
between 2 to 5 years tenor; $60 million from
FMO and PROPARCO for tenor between 3 to
5 years and $32.7 million from the EIB for
tenor of 8 years.
Information from the Bank indicates the facility
from Citibank/OPIC, IFC, FMO/PROPARCO
will provide lending to telecommunications,
power and infrastructure projects.
In addition, FCMB will utilize a portion of the
loan from Citibank/OPIC to finance Small and
Medium Scale enterprises (SMEs) and other
activities that will enhance financial inclusion in
Nigeria. The $32.7 million provided by EIB will
be dedicated to channel expansion purposes.
FCMB had earlier this year, considered raising
$300 million from the Eurobond markets, but
the plan was suspended due to unfavorable
market terms. It is pertinent to note that the
average interest rate on the DFI facilities is
about 4 per cent below the Eurobond’s rate
According to the Group Managing Director/
Chief Executive of FCMB, Mr. Ladi Balogun,
‘’the successful fund raising exercise and the
number of international institutions that
participated in the provision of the facilities is a
demonstration of the level of confidence which
investors and the international financial market
have in FCMB and the Nigerian financial
market as a whole”. He added that, “we are
excited about this development as it shows
that the financial institutions truly believe in the
growth potential of FCMB, the excellent
corporate governance structures and culture
we have put in place’’.
Mr. Balogun added that a large part of the
facility will be used to support critical areas of
the Nigerian economy, ‘’in line with our
commitment to always provide veritable
source of funding for the businesses of our
customers, while also adding value to our
shareholders’’.