Deutsche Bank provides 507 million euro loan to the Republic of Benin

Deutsche Bank acted as the sole mandated lead arranger and lender of a 507 million euro senior unsecured amortising term loan facility to the Republic of Benin.

The facility, with a final maturity of 15 years, is structured with a first loss/ second loss guarantee structure covering in aggregate 100% of principal and lifetime interest, whereby:

• The International Development Association (IDA), a member of the World Bank Group, provided the First-Loss Guarantee for a total amount of up to 200 million euro. This marks the first IDA guarantee approved under the World Bank Group’s new guarantee platform (announced in a press release on October 31, 2024).
• African Trade & Investment Development Insurance (“ATIDI”) provided a Second-Loss Guarantee through credit insurance covering the remaining principal and interest not covered by the IDA Guarantee.

The loan benefits from the first IDA guarantee approved under the World Bank Group’s new guarantee platform, where the net proceeds of the Facility are used in part in the context of the liability management operation announced on 8 January 2025 by the Republic, to buy back some of the Republic’s international EUR2032s bond, capped at 250 million euro.

This operation allowed the Republic to extend the average maturity of the public debt portfolio while achieving debt service savings thanks to the IDA-backed loan arranged by Deutsche Bank.

Some of the remaining net proceeds of the Facility as well as the savings achieved through this operation will then be used to finance or refinance expenditures eligible under the Republic’s SDG financing framework.

Maryam Khosrowshahi, Chair of Global SSA, Head of Sub-Saharan Africa Coverage and CEEMEA Sovereign DCM, said: " We are proud to have acted as sole mandated lead arranger and sole lender to the Republic of Benin on this novel transaction with IDA and ATIDI. We leveraged our successful financing track-record with the Republic of Benin as well as our excellent relationship with the Republic’s advisor Rothschild & Co, and extensive transaction experience with the World Bank Group and ATIDI to deliver this critical financing in an effective and timely manner. Timing was indeed of the essence as the Facility was signed on 8 January 2025 concurrently to the announcement of a tender offer targeting up to 250 million euro of Benin’s EUR2032s notes and of a new 500 million US dollar bond issue to complement the country’s 2025 budgetary needs.”

This transaction consolidates Deutsche Bank’s position as a leading arranger of complex transactions on the African continent, after being named notably Best Foreign Investment Bank in Benin for the 2nd year in a row by EMEA Finance African Banking Awards 2024.