AFFIC assisted a leading pan-African financial institution in a complex mixed fundraising operation, strengthening its capital structure to support its continental development ambitions.

About the deal

In an economic context demanding increased resource mobilization for infrastructure and private sector financing in Africa, this multilateral development bank has launched an ambitious program to strengthen its capital base. The institution, a key player in regional development, sought to optimize its balance sheet while increasing its capacity to intervene without necessarily immediately soliciting its state shareholders.

The transaction involved an innovative financial structure combining two distinct instruments: a senior debt tranche to ensure long-term liquidity and a hybrid equity tranche. This latter instrument, still relatively uncommon on the continent, allows the bank to strengthen its prudential capital (Tier 1 or Tier 2) through subordinated debt with indefinite or very long maturities.

This strategic fundraising aims to achieve two objectives: to improve the bank's solvency ratios with rating agencies and to increase its leverage to finance more high-impact projects. Thanks to these new resources, the institution is now better equipped to implement its five-year strategy, which focuses in particular on renewable energy and industrialization, while maintaining a robust and resilient financial structure in the face of external shocks.

The role of AFFIC

AFFIC acted as the exclusive financial and strategic advisor to the multilateral bank for this highly complex transaction. Our involvement began with a thorough analysis of the institution's balance sheet structure and its regulatory capital requirements. We recommended the issuance of hybrid instruments as the optimal solution to reconcile the requirements of rating agencies with the constraints of existing shareholders.

Our team led the financial engineering of the transaction, defining the precise characteristics of the securities (interest rates, maturity, conversion clauses) to make them attractive to international institutional investors and development funds (DFIs). AFFIC also prepared all the financial and marketing documentation (Information Memorandum) required for approaching the markets.

During the placement phase, we leveraged our network to identify and engage investors capable of subscribing to complex instruments with long maturities. We assisted the bank in negotiating the financial and legal terms, ensuring that its interests and operational flexibility were protected. This mandate illustrates AFFIC's specialized expertise in financial engineering for public and semi-public institutions, enabling it to structure customized solutions that meet international standards.

Deal Team