The Eastern and Southern African Trade and Development Bank plans to raise $300 million in a syndicated loan by September to help fund projects in the region.
The lender, also known as PTA Bank, plans to have a $1 billion infrastructure fund and a $500 million trade-finance fund in operation by 2015, President and Chief Executive Officer Admassu Tadesse said in an interview yesterday in the Rwandan capital, Kigali, where he’s attending the African Development Bank’s annual meeting.
PTA Bank wants to increase lending for trade and infrastructure projects in a region where countries including Kenya, Zambia and Mozambique are set to outpace the sub-Saharan African growth forecast of 5.4 percent for 2014, according to the International Monetary Fund.
The bank is looking to syndications “as a way of leveraging our institution to facilitate more capital flow into our projects,” he said. Bujumbura, Burundi-based PTA is positioning itself “to manage special-purpose funds on behalf of a range of investors,” Admassu said.
It’s planning to sell the equivalent of $25 million in local-currency debt in Tanzania and hold similar issues in Kenya and Rwanda in 2015, he said. A loan worth $120 million is expected soon from a European bank, Admassu said, without identifying the lender. That follows $60 million PTA got from China Development Bank Corp. this month, he said.
The bank is selling shares to existing investors over two years to raise $160 million and also seek capital from new sources including Chinese sovereign wealth funds and African pension funds, Admassu said. It targets raising $200 million in equity and debt for the infrastructure fund in the next 12 months, while the trade-finance fund will be debt only, he said.
PTA, which financed projects including planes for Ethiopian Airlines Enterprise, crude for Zambia’s Water and Energy Ministry and a bottling line for Heineken NV’s Burundian Brarudi SA, sold $300 million of notes due December 2018 last year. Yields rose one basis point to 5.197 percent by 11:27 a.m. in Kigali.
“We are going to maintain a regular presence in the Eurobond market” and may sell another 2015, Admassu said.
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