Nedbank CIB scoops another prestigious award!

Infrastructure and project finance
Geita Gold Mining’s $115m dual-currency loan financing
Sole mandated lead arranger and bookrunner: Nedbank CIB
Facility A (US $) lender: Nedbank CIB
[Facility B (Tanzanian shillings) lenders: First National Bank Tanzania, Standard Chartered Bank Tanzania, NMB Bank, National Bank of Commerce, Stanbic Bank Tanzania, Ecobank Tanzania]

In a landmark dual-currency deal for Tanzania, Geita Gold Mining (GGML) was able to borrow US $115m with the unsecured participation of local banks at a time when local regulations were evolving.

GGML is one of the largest corporates in Tanzania, and one of the largest mines in the AngloGold Ashanti portfolio. It needed project financing to expand underground operations. However, in 2018 the Tanzanian government introduced new local content regulations that sought to achieve broad-based participation of indigenous enterprises in the mining sector. That includes the provision of financial services.

Local banks have traditionally had limited interaction with the large global miners that operate in the country and typically procure financing elsewhere. In addition, foreign investment in Tanzania’s mining sector has been muted since the imposition of taxation-linked fines on Barrick Mining’s Acacia Mining.

Nedbank CIB underwrote the entire US $115m transaction and then began the process of distributing a portion of the exposure in Tanzanian shillings. The market was sounded out and interested lenders provided non-binding expressions of interests. Based on the responses received, final commercial terms were distributed to banks.

In order to accommodate indigenous Tanzanian banks, their accession into the facilities had to be managed on a bespoke basis, unlike traditional underwritten syndications. Nedbank CIB navigated lenders through the regulatory changes and risk mitigants inherent in the transaction, giving them time to get comfortable with the deal.

The result was a first-of-its-kind syndicated Tanzanian shillings mining transaction, using a mechanism where acceding Tanzanian shillings lenders de-risked the existing US dollar lender. It provided certainty for GGML, while sounding out the market for credit appetite among local lenders to participate in local currency.

Landmark dual-currency deal for Tanzania, Geita Gold Mining (GGML)