The Nigerian National Petroleum Company Limited (NNPCL) is the sponsor of a syndicated US$3.3 billion crude oil prepayment facility that African Export-Import Bank (Afreximbank) has successfully secured. A US$2.25 billion first payment has been paid. It is anticipated that a second tranche of US$1.05 billion will be released later. This historic financing represents one of the largest syndicated loan raises in Africa for 2023 as well as Nigeria's largest crude oil prepayment facility. Amidst present challenges and year-end pressures in the credit markets, investors were eager to take US$250 million and US$500 million ticket sizes into consideration. A margin of 6.0% annually over the three-month secured overnight financing rate (SOFR) is attached to the five-year facility.
In order to shorten the facility's final maturity and free up cash flow from future pledged cargoes for Nigeria, the transaction structure includes an embedded price balance mechanism whereby 90% of all excess cash from the sale of the committed barrels (after debt service) will be released. The remaining 10% will be used to prepay the facility. The first lenders to participate are Sahara Energy Resources Limited, a prominent international energy and infrastructure conglomerate owned by Africans, Gunvor International BV, a multinational energy and commodities trading company based in Geneva, and Afreximbank, Africa's multilateral trade finance institution.