On Friday 31th March 2023, The Mauritius Commercial Bank Limited (“MCB” or the “Bank”) successfully closed its first Basel III Tier 2 bond issuance of USD147m, privately placed with the African Development Bank (“AfDB”).
The proceeds from this transaction will sustain the Bank’s strategic ambitions to pursue its international expansion in the region and across Africa and will consolidate the capital base of the Bank. This issuance is also one of the initiatives undertaken by MCB to optimise and diversify its funding profile.
The Tier 2 bond, with a tenor of 10 years, builds on the long-standing relationship of MCB with AfDB, which has spanned over 20 years. MCB benefited from two lines of credit from AfDB in 2002 and 2013 respectively, which have now been repaid. Furthermore, the Bank also secured a subordinated loan from AfDB in 2013, which will be fully repaid in August 2023.
AfDB is a regional multilateral development finance institution headquartered in Abidjan, Ivory Coast. Founded in 1964, the overarching objective of the AfDB Group is to spur sustainable economic development and social progress in its regional member countries, thus contributing to poverty reduction.
JP Morgan and SMBC Nikko Capital Markets Limited acted as Placement Agents.
Alain Law Min, Chief Executive Officer (CEO), MCB Ltd: “This first Basel III Tier 2 bond issuance is a landmark transaction for MCB. The collaboration between MCB and AfDB has spanned over several decades and we are thankful to AfDB for their continued support and for their trust and confidence in our organization to deliver on our strategies. This capital and funding instrument will finance high impact projects in the Sub-Saharan and Indian Ocean regions as MCB pursues its sustainable development agenda. Our strategy is also aligned with that of AfDB, which takes a long-term view on the socio-economic development of Mauritius and the region. Finally, the success of this placement reflects the international recognition of the Bank’s strong fundamentals, its investment grade ratings and investor confidence in MCB’s growth potential.’’
This instrument is the first Basel III bond issuance in the debt capital market by a Mauritian bank to date.