Stanbic Bank signs debut $85m loan

DUBAI - Stanbic Bank Uganda (SBU) has signed an $85 million, 18-month loan to fund its general business activities, the first time it has borrowed from international loan markets, the main arranger of the facility said on Wednesday.

The lender joins a flurry of sub-Saharan African banks that have tapped loan markets in recent weeks, as local institutions look to increase their funding bases and international lenders seek higher returns in emerging economies compared with the low interest rate environment back home.

SBU will use the funds to back lending for trade-related finance in chosen sectors such as energy, manufacturing, and infrastructure among others.

It is paying an interest rate of 250 basis points over the London interbank offered rate (Libor), a statement from Dubai's Emirates NBD said.

The loan was originally targeting $75 million but was increased due to interest from banks wanting to back the deal. The final list of participants included Al Ahli Bank Kuwait, Al Khaliji Commercial Bank, Commercial Bank of Qatar and Standard Chartered.

"This is the first syndicated loan from Uganda into the Middle East and we expect many more, because of strong investor interest from the Gulf for African credits," said Dr Rassem Zok, Chief Executive of Standard Bank of South Africa, MENA.

Reuters

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