Beijing signing ceremony between the People's Bank of China and PTA Bank for Class B Shares
Africa Reinsurance Cooperation (Africa-RE) and PTA Bank Signing ceremony, Friday 14th November.
Mr. Corneille Karekezi, Managing Director , Africa –RE and Mr. Admassu Tadesse, PTA Bank President and CEO.
11 November 2014, Frankfurt. PTA Bank today in Frankfurt concluded a milestone international syndicated loan with a syndicate of leading international banks. Launched at a target size of US$ 200 million, the facility closed at USD 320 million, 1.6 times over-subscribed, and yielding more than double the USD 150 million raised in the 2012 debut facility. The facility was priced about 25% below the 2012 issue, reflecting the Bank’s improved credit.
Over a dozen regional and international banks joined the general syndication, with unprecedented participation from several African financial institutions notably Egypt and South Africa. The Bank had appointed a global and diverse mix of initial mandated lead arrangers, namely Commerzbank and KfW (Germany), ICBC (China), Mashreq Bank (UAE), Rand Merchant Bank (South Africa), SMBC (Japan) and Standard Chartered (UK). Other mandated lead arrangers which invested sizeable amounts were Bank du Caire (Egypt), BTMU (Japan), Nedbank (South Africa), China EXIM Bank, and Al Ahli Bank (Kuwait).
Earlier in November 2013, the Bank successfully issued its 2nd Eurobond of USD 300 million on the Luxembourg Stock Exchange. Unlike the previous Eurobond, the 2013 issue combined both a balance sheet funding objective as well as a liability management exercise (LME) to retire earlier, higher cost debt. The LME involved an exchange process in which several investors of the 2010 bond were convinced to have their bonds redeemed early for the benefit of extended duration via the new 5 year transaction. The LME transaction was the first by a non-sovereign borrower in Africa aside from South Africa.
Commenting at the commemoration occasion in Frankfurt, Mr. Tadesse, PTA Bank President, said, “We are pleased that our sustained performance and commitment to high standards of corporate governance is being rewarded. We are grateful to our correspondent banking partners for their increased African appetite and specifically their confidence in us as we grow, modernize and vigorously pursue our vision of being a world class specialized African financial institution”.
The Bank’s international syndicated loans and Eurobond issues are part of a wider resource mobilization thrust that entails short-medium term fundraising from international capital markets for cross-border and other trade; as well as longer term funding from specialized development financing partners for high impact development financing in areas such as renewable energy and cross-border power and transport infrastructure.
Following the commemorative event, Mr. Tadesse held bilateral meetings with Dr. Ulrich Schroder, KfW Bank CEO, and signed additional cooperation agreements that will deepen the new funding partnership that commenced in 2013. The partnership with KfW forms part of the set of new funding partnerships with AFD, BNDES and EIB in Europe, building on the successful partnerships with the African Development Bank, the People’s Bank of China, China Development Bank, FMO and OFID. In October 2014, on the sidelines of the World Bank/IMF annual meetings, PTA Bank was inaugurated as a new member of the IDFC – the global club of like-minded leading development banks.
The Bank’s assets have been growing at an average of over 30% per annum, with the balance sheet surpassing the USD 3 billion mark, and non-performing loans dropping to a historic low of below 4%. It has equity returns of 14% (3 year average) and a cost-to-income ratio of about 16% - among the best in the industry. The Bank also enjoyed its first international credit rating upgrade by Fitch Ratings in 2013 (up to BB). GCR also upgraded the Bank a year ealier (up to BB+). The Bank’s highest rated shareholders, notably the AfDB, Mauritius, Seychelles and the PBoC have sharply increased their stake in the Bank in the past 12 months.
With growing confidence, the Bank’s capital jumped by a record 39% in 2013, as current and new shareholders paid-in a historic amount of USD 66 million in a single year. Its shareholders have also recently approved a new capital increase of USD 100 million to be implemented over a three year period. In the past 12 months, the Bank has attracted eight new institutional investors - 3 pension funds, 3 insurance and re-insurance companies and two other specialized financial institutions. Notably, 7 of these were African institutional investors, a further reflection of the confidence of African investors in their own financial institutions that show a commitment to strong corporate governance and high performance.
The Bank’s new strategy, developed in 2012, has ushered in reforms that have seen the creation of a new class of shareholding to attract institutional investors, and the introduction of specialized board committees along with new board seats for institutional investors and independents. The Bank, re-positioned as a unique African PPP, has resulted also in new business initiatives such as off-balance sheet funds management with specialized JV partners, niche advisory services and an expansion in the Bank’s geographic scope to include other fast growing and high potential economies such as Mozambique, South Sudan, Madagascar and Angola.
The Bank’s institutional framework has also been strengthened with a Chief Risk Officer, a Chief Financial Officer, Treasurer and Credit Risk Manager, among others to guide quality growth, ensure sound risk management and improve the Bank’s technology and banking practices.