There are indications that the GCC banking sector is emerging as a source of syndicated loans for Africa and Asia. Two African banks, Uganda’s Stanbic and South Africa’s FirstRand have taken advantage of the GCC’s superior liquidity when compared to European and American banks. In addition to the African loans, Gulf banks have also created facilities for the Commercial Bank of China last November, financing firm Astra Sedaya Finance and airline Garuda Indonesia, with leasing company Far East Horizon in the process of arranging a loan.
Uganda’s Stanbic Bank signed a $85 million eighteen-month term loan facility with five lenders, including Emirates NBD Capital Limited, Al Ahli Bank, Al Khalij Commercial Bank, The Commercial Bank of Qatar and Standard Chartered Bank. With four Gulf banks involved with the deal, Stanbic’s move was one of a number. Stanbic initially sought an amount of $75 million and obtained an additional $15 million due to oversubscription. Patrick Mweheire, Chief Executive of Stanbic Uganda said, “Being the leading bank in Uganda, we are thrilled to be setting another precedent and tapping the international syndicated loan market to raise senior debt at such tight pricing. The dollarized piece of the Ugandan economy has grown over the recent years and we intend to deploy these proceeds to support this growth in several high impact sectors.”
FirstRand, one of the largest lenders in South Africa, raised an initial $125 million loan with Emirates NDB Capital Limited which was oversubscribed to $235 million. The deal featured participation from five Gulf lenders and has a tenor of two years. Emirates NBD released a statement claiming that the deal arose due to the South Africa bank’s strong links within the GCC and a general increase in interest when it comes to financing syndicated loans in Africa.