CRDB Bank boosts loan facility following third oversubscribed funding round

The successful collaboration between Intesa Sanpaolo and Investec Bank continues to attract oversubscribed market support for a syndicated term loan facility, which was first launched in 2022 to boost the liquidity at Tanzania’s largest bank, CRDB Bank. 

This latest transaction – the third to date – serves to refinance the existing facility that was established to unlock working capital and support CRDB Bank's lending portfolio for the corporate, small and medium enterprise (SME) sector in Tanzania and Burundi, including project and infrastructure finance linked to the commodity sector.

Rowan King, Head of Business Development and Origination for Africa at Investec Bank, says global financial institutions' confidence in CRDB Bank and Tanzania's economy is certainly evident by this latest transaction and once again demonstrates the growing relationship between Investec and CRDB Bank.

“Tanzania remains a critical cog in the pan-African economic growth engine, serving as a key export route for commodities produced in East, Southern and Central Africa,” explained Marc Kohne, Head: Africa Leveraged Finance at Investec Bank.

With the rising demand for key commodities produced in Africa, which are essential for the transition to green energy, Tanzania will play an increasingly important role in both inter-African and global trade. This is particularly true for supplying Middle Eastern and Asian markets, where access to innovative funding will be vital for realising this growth.

The latest fund-raising round attracted numerous new global funders to the transaction alongside existing lenders whose credit appetite increased from the previous year. 

“This year’s larger funding in the two-year tranche compared to last year reflects the growing trust and confidence of global lenders in CRDB Bank. Their continued support highlights our strong credit standing and reinforces our position as a reliable financial partner,” said Abdulmajid Nsekela, CRDB Bank Group CEO.

The latest oversubscribed capital raise continues a trend that started with the initial transaction, with Intesa and Investec serving as joint coordinators and book runners. Investec also acted as the facility agent for the maiden syndicated loan deal, with Mauritius Commercial Bank fulfilling the role in 2023 and again in 2024.

When the transaction was initially launched to the market in 2022 it aimed to raise US$50 million, however, it was oversubscribed, receiving $130 million in interest. Now in its third iteration with a target of $100 million, the latest fundraise received further significant interest, resulting in oversubscribed commitments of $247 million. 

The new $150-million term loan facility is split between a $45 million two-year tranche and a $105 million one-year tranche facilitated by a strong pool of 17 lenders across Africa, the Middle East, Europe and the United Kingdom. 

“Our ability to attract a wide spread of investors in the facility, including new participants, demonstrates a healthy interest in the placement,” added Leanne Large, Head of Distribution and Loan Syndication at Investec Bank.  “Furthermore, CRDB Bank continues to impressively grow its business and balance sheet attracting a record number of investors into its 2024 Syndicated Loan, solidifying its position as the leading bank in Tanzania, which we are proud to be associated with,” adds Large.

Gustaaf Eerenstein, Syndications Director at Intesa Sanpaolo commented: “This again serves as testament to the quality of the management and people of CRDB Bank in successfully concluding another landmark syndicated loan, particularly in the current volatile environment.”

According to Large, the growing appetite among global financial institutions to fund the deal with longer funding tenors affirms market confidence in CRDB Bank and the continued stability and economic growth prospects in the region. 

“The latest transaction affirms East Africa's attractiveness as an investment destination for global capital and confidence in CRDB Bank's position as a leading African banking institution and creditworthy lender.”

Established in 1996, CRDB Bank is an integrated financial services provider and the largest bank in Tanzania, with an asset base of TZS 12.5 trillion (c. US$4.9bn as at 30 June 2023). It is active in the corporate, retail, business, treasury, premier, and wholesale microfinance.

“The latest in a string of landmark syndicated loans affirms the global market's confidence in the management and people of CRDB Bank,” commented Eerenstein,. “The renewed funding line also comes at a pivotal moment as the global economy gears up for recovery.”

“The larger facility will boost our existing lending activities to support continued economic growth and prosperity in the region and further strengthen our position as a leading financial institution in Africa,” continues Nsekela. “I would like to thank Investec Bank and Intesa for their continued support,” he concludes.

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