Obbligazione Afriximbank 5.75% ( XS0650262875 ) in USD

Afriximbank

100 USD ▼

Egitto

XS0650262875 ( in USD )

5.75% per anno ( pagato 2 volte l'anno)

27/07/2016 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione Afreximbank XS0650262875 in USD 5.75%, scaduta

200 000 USD

500 000 000 USD

Afreximbank è una banca multilaterale di sviluppo panafricana che finanzia e promuove il commercio intra-africano e il commercio tra l'Africa e il resto del mondo.

The Obbligazione issued by Afriximbank ( Egypt ) , in USD, with the ISIN code XS0650262875, pays a coupon of 5.75% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 27/07/2016

The African Export-Import Bank
(Established pursuant to the Agreement for the Establishment of the African Export-Import Bank,
signed in Abidjan, Co^te D'Ivoire, 8 May 1993)
US$1,500,000,000
Euro Medium Term Note Programme
Under the Euro Medium Term Note Programme described in this Base Prospectus (the ``Programme''), the African Export-
Import Bank (the ``Issuer'', ``Afreximbank'' or the ``Bank''), subject to compliance with all relevant laws, regulations and
directives, may from time to time issue Euro Medium Term Notes (the ``Notes''). The aggregate nominal amount of Notes
outstanding under the Programme will not at any time exceed US$1,500,000,000 (or the equivalent in other currencies).
The Notes may be issued on a continuing basis to one or more of the Dealers specified under ``Overview of the
Programme'' and to any additional Dealer appointed under the Programme from time to time by the Issuer (each a
``Dealer'' and together the ``Dealers''), which appointment may be for a specific issue or on an ongoing basis. References in
this Base Prospectus to the ``relevant Dealer'' shall, in the case of an issue of Notes being (or intended to be) subscribed by
more than one Dealer, be to all Dealers agreeing to subscribe such Notes.
Application has been made to admit the Notes to be issued under the Programme to listing on the Official List of the
Luxembourg Stock Exchange (the ``Official List'') and to trading on the Euro MTF market (the ``Euro MTF''). References
in this Base Prospectus to Notes being ``listed'' (and all related references) shall mean that such Notes have been admitted
to the Official List and admitted to trading on the Euro MTF. In relation to listed Notes, this Base Prospectus is valid for
a period of one year from the date hereof. However, unlisted Notes may be issued under the Programme. The relevant
Final Terms in respect of the issue of any Notes will specify whether or not such Notes will be listed on the Official List
and admitted to trading on the Euro MTF (or any other stock exchange).
Each Series (as defined in ``Overview of the Programme Method of Issue'') of Notes in bearer form will be represented
on issue by a temporary global note in bearer form (each a ``temporary Global Note'') or a permanent global note in bearer
form (each a ``permanent Global Note''). If the Global Notes are stated in the applicable Final Terms to be issued in new
global note (``NGN'') form, the Global Notes will be delivered on or prior to the original issue date of the relevant
Tranche to a common safekeeper (the ``Common Safekeeper'') for Euroclear Bank S.A./N.V. (``Euroclear'') and Clearstream
Banking, socie´te´ anonyme (``Clearstream, Luxembourg''). Notes in registered form will be represented by registered
certificates (each a ``Certificate''), one Certificate being issued in respect of each Noteholder's entire holding of Registered
Notes of one Series. Registered Notes issued in global form will be represented by registered global certificates (``Global
Certificates''). If a Global Certificate is held under the New Safekeeping Structure (the ``NSS'') the Global Certificate will
be delivered on or prior to the original issue date of the relevant Tranche to a Common Safekeeper for Euroclear and
Clearstream, Luxembourg. Global Notes which are not issued in NGN form (``Classic Global Notes'' or ``CGNs'') and
Global Certificates which are not held under the NSS will be deposited on the issue date of the relevant Tranche with a
common depositary on behalf of Euroclear and Clearstream, Luxembourg (the ``Common Depositary'').
The Issuer has been assigned ``BBB-/F3-'' ratings by Fitch Ratings Limited, ``BBB-/A-3'' by Standard & Poor's Rating
Services and ``Baa2/Prime-2'' ratings by Moody's Investors Service. Tranches of Notes (as defined in ``Overview of the
Programme Method of Issue'') to be issued under the Programme may be rated or unrated. Whether or not a rating in
relation to any tranche of Notes will be treated as having been issued by a credit rating agency established in the European
Union and registered under Regulation (EC) No 1060/2009 on credit rating agencies (the ``CRA Regulation'') will be
disclosed in the relevant Final Terms. In general, European regulated investors are restricted from using a rating for
regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered
under the CRA Regulation unless the rating is provided by a credit rating agency operating in the European Union before
7 June 2010 which has submitted an application for registration in accordance with the CRA Regulation and such
registration is not refused. Where a Tranche of Notes is to be rated, such rating will not necessarily be the same as the
ratings assigned to the Issuer. A rating is not a recommendation to buy, sell or hold securities and may be subject to
suspension, reduction or withdrawal at any time by the assigning rating agency.
Prospective investors should have regard to the factors described under the section headed ``Risk Factors'' in this Base
Prospectus.
Arrangers and Dealers
Commerzbank
HSBC
Mitsubishi UFJ Securities International plc
Standard Bank
The date of this Base Prospectus is 5 July 2011
Proof
5:
5.7.11

The Issuer accepts responsibility for the information contained in this Base Prospectus. To the best of
the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the
information contained in this Base Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
No person has been authorised to give any information or to make any representation other than
those contained in this Base Prospectus in connection with the issue or sale of the Notes and, if given
or made, such other information or representation must not be relied upon as having been authorised
by the Issuer or any of the Dealers or the Arrangers (as defined in ``Overview of the Programme'').
Neither the delivery of this Base Prospectus nor any sale made in connection herewith shall, under
any circumstances, create any implication that there has been no change in the affairs of the Issuer
since the date hereof or the date upon which this Base Prospectus has been most recently amended or
supplemented, or that there has been no adverse change in the financial position of the Issuer since
the date hereof or the date upon which this Base Prospectus has been most recently amended or
supplemented or that any other information supplied in connection with the Programme is correct as
of any time subsequent to the date on which it is supplied or, if different, the date indicated in the
document containing the same.
Neither the issue of this Base Prospectus nor the issue, subscription, offering and sale of the Notes
constitutes a waiver by the Issuer or by any of its members, Directors, officers or employees of any
of the rights, immunities, privileges or exemptions conferred upon any of them by the Agreement for
the Establishment of the African Export-Import Bank dated 8 May 1993 (the ``Establishing
Agreement'') or the Headquarters Agreement between the Issuer and the Arab Republic of Egypt
dated 31 August 1994 (the ``Headquarters Agreement''). The Issuer is, however, amenable to suit in
respect of its obligations under the Notes in accordance with the Terms and Conditions of the Notes.
THE NOTES ARE NOT AN OBLIGATION OF ANY GOVERNMENT.
The distribution of this Base Prospectus and the offering or sale of the Notes in certain jurisdictions
may be restricted by law. Persons into whose possession this Base Prospectus comes are required by the
Issuer, the Dealers and the Arrangers to inform themselves about and to observe any such restrictions.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended (the ``Securities Act'') and include Notes in bearer form that are subject to US tax law
requirements. Notes may not be offered, sold or delivered within the United States or to US persons
except in certain transactions exempt from the registration requirements of the Securities Act. For a
description of certain restrictions on offers and sales of Notes and on the distribution of this Base
Prospectus, see ``Subscription and Sale''.
This Base Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or
the Dealers to subscribe for, or purchase, any Notes.
To the fullest extent permitted by law, none of the Dealers or the Arrangers accept any responsibility
for the contents of this Base Prospectus or for any other statement, made or purported to be made by
an Arranger or a Dealer or on its behalf in connection with the Issuer or the issue and offering of the
Notes. Each Arranger and each Dealer accordingly disclaim all and any liability whether arising in tort
or contract or otherwise (save as referred to above) which it might otherwise have in respect of this Base
Prospectus or any such statement.
Neither this Base Prospectus nor any financial statements are intended to provide the basis of any credit
or other evaluation and should not be considered as a recommendation by any of the Issuer, the
Arrangers or the Dealers that any recipient of this Base Prospectus or any financial statements should
purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the
information contained in this Base Prospectus and its purchase of Notes should be based upon such
investigation as it deems necessary. None of the Dealers or the Arrangers undertake to review the
financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Base
Prospectus nor to advise any investor or potential investor in the Notes of any information coming to the
attention of any of the Dealers or the Arrangers.
In connection with the issue of any Tranche (as defined in ``Overview of the Programme Method of
Issue''), the Dealer or Dealers (if any) named as the stabilising manager(s) (the ``Stabilising
Manager(s)'') (or any person acting on behalf of any Stabilising Manager(s)) in the applicable Final
Terms may over-allot Notes or effect transactions with a view to supporting the market price of the
Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the
2
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager) will undertake
stabilisation action. Any stabilisation action may begin on or after the date on which adequate public
disclosure of the terms of the offer of the relevant Tranche is made and, if begun, may be ended at any
time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche
and 60 days after the date of the allotment of the relevant Tranche. Any stabilisation action or over-
allotment must be conducted by the relevant Stabilising Manager(s) (or any person acting on behalf of
any Stabilising Manager(s)) in accordance with all applicable laws and rules.
The provisions governing the exchange of interests in Global Notes for other Global Notes and
definitive Notes are described in ``Summary of Provisions Relating to the Notes while in Global
Form''.
In this Base Prospectus, unless otherwise specified or the context otherwise requires, references to
``euro'' and ``e'' are to the currency introduced at the start of the third stage of the European
Economic and Monetary Union pursuant to the Treaty establishing the European Community as
amended, references to ``US dollars'', ``US$'' and ``United States dollars'' are to the lawful currency of
the United States of America, its territories and possessions, and references to ``£'' or ``Sterling'' are
to the lawful currency of the United Kingdom. All references to Egypt are to the Arab Republic of
Egypt.
3
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

DOCUMENTS INCORPORATED BY REFERENCE
This Base Prospectus should be read and construed in conjunction with the audited consolidated
financial statements of the Issuer for the three financial years ended 31 December 2008, 31 December
2009 and 31 December 2010 and the unaudited consolidated financial statements of the Issuer for the
financial quarter ended 31 March 2011, respectively, together in each case with the audit report
thereon, which have been previously published or are published simultaneously with this Base
Prospectus. Such documents shall be incorporated in and form part of this Base Prospectus, save that
any statement contained in a document which is incorporated by reference herein shall be modified or
superseded for the purpose of this Base Prospectus to the extent that a statement contained herein
modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any
statement so modified or superseded shall not, except as so modified or superseded, constitute a part
of this Prospectus. Any documents themselves incorporated by reference in the documents
incorporated by reference in this Prospectus shall not form part of this Prospectus.
Copies of documents incorporated by reference in this Prospectus may be obtained without charge
from the registered offices of the Issuer, the Paying Agents, the Trustee and the website of the
Luxembourg Stock Exchange (www.bourse.lu).
The table below sets out the relevant page references for the audited consolidated statements for the
financial years ended 31 December 2008, 31 December 2009 and 31 December 2010, respectively, as
set out in the Issuer's Annual Report, together with the unaudited financial statements of the Issuer
for the financial quarter ended 31 March 2011 as set out in the Issuer's Interim Report. Information
contained in the documents incorporated by reference other than information listed in the table below
is for information purposes only, and does not form part of this Prospectus.
Audited consolidated annual financial statements of the Issuer for the financial year ended 31 December 2008
The African Export Import Bank Annual Report 2008
Income Statement ....................................................................................................................
Page 88
Balance Sheet ...........................................................................................................................
Page 89
Cash Flow Statement...............................................................................................................
Page 91
Accounting Principles ..............................................................................................................
Page 92
Notes........................................................................................................................................
Page 92
Auditor's Report......................................................................................................................
Page 87
Audited consolidated annual financial statements of the Issuer for the financial year ended 31 December 2009
The African Export Import Bank Annual Report 2009
Income Statement ....................................................................................................................
Page 96
Balance Sheet ...........................................................................................................................
Page 97
Cash Flow Statement...............................................................................................................
Page 99
Accounting Principles ..............................................................................................................
Page 100
Notes........................................................................................................................................
Page 100
Auditor's Report......................................................................................................................
Page 95
Audited consolidated annual financial statements of the Issuer for the financial year ended 31 December 2010
The African Export Import Bank Annual Report 2010
Income Statement ....................................................................................................................
Page 94
Balance Sheet ...........................................................................................................................
Page 95
Cash Flow Statement...............................................................................................................
Page 97
Accounting Principles ..............................................................................................................
Page 98
Notes........................................................................................................................................
Page 98
Auditor's Report......................................................................................................................
Page 93
Unaudited consolidated financial statements of the Issuer for the financial quarter ended 31 March 2011
The African Export Import Bank Interim Report at 31 March 2011
Income Statement ....................................................................................................................
Page 1
Balance Sheet ...........................................................................................................................
Page 2
Cash Flow Statement...............................................................................................................
Page 3
Notes........................................................................................................................................
Page 4
4
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

SUPPLEMENTARY BASE PROSPECTUS
The Issuer has given an undertaking to the Dealers that if at any time during the duration of the
Programme there is a significant new factor, material mistake or inaccuracy relating to information
contained in this Base Prospectus which is capable of affecting the assessment of any Notes and
whose inclusion in or removal from this Base Prospectus is necessary for the purpose of allowing an
investor to make an informed assessment of the assets and liabilities, financial position, profits and
losses and prospects of the Issuer, and the rights attaching to the Notes, the Issuer shall prepare an
amendment or supplement to this Base Prospectus or publish a replacement Base Prospectus for use
in connection with any subsequent offering of the Notes and shall file such amendment, supplement
or replacement Base Prospectus with the Luxembourg Stock Exchange and shall supply to each
Dealer, the Trustee and the Luxembourg Stock Exchange such number of copies of such supplement
hereto as such Dealer, the Trustee and the Luxembourg Stock Exchange may reasonably request.
5
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

TABLE OF CONTENTS
Page
RISK FACTORS ...........................................................................................................................
7
OVERVIEW OF THE PROGRAMME .......................................................................................
18
TERMS AND CONDITIONS OF THE NOTES ........................................................................
22
SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM
44
USE OF PROCEEDS ....................................................................................................................
49
CAPITALISATION.......................................................................................................................
50
SELECTED FINANCIAL INFORMATION ..............................................................................
51
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS .................................................................................................
54
DESCRIPTION OF THE AFRICAN EXPORT-IMPORT BANK ............................................
58
MATERIAL DEVELOPMENTS IN THE BANK'S BUSINESS AND PROSPECTS
ARISING SINCE 31 DECEMBER 2010 AND KEY TRENDS ARISING FROM THE
BANK'S REVIEWED INTERIM FINANCIAL STATEMENTS FOR THE THREE
MONTHS ENDED 31 MARCH 2011 .....................................................................................
109
TAXATION ...................................................................................................................................
113
SUBSCRIPTION AND SALE ......................................................................................................
114
FORM OF FINAL TERMS .........................................................................................................
118
GENERAL INFORMATION.......................................................................................................
125
6
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

RISK FACTORS
An investment in the Notes involves a high degree of risk. Prospective investors should carefully consider,
among other things, the risks set forth below and the other information contained in this Base
Prospectus prior to making any investment decision with respect to the Notes. The risks highlighted
below could have a material adverse effect on the Issuer's business, financial condition, results of
operations or prospects, which, in turn, could have a material adverse effect on its ability to make
payments under the Notes.
In addition, the value of the Notes could decline due to any of these risks, and prospective investors may
lose some or all of their investment. Prospective investors should note that the risks described below are
not the only risks that the Issuer faces but are the risks that the Issuer currently considers to be
material. There may be additional risks that the Issuer currently considers immaterial or of which it is
currently unaware, and any such risks could have effects similar to the risks set forth below.
Factors which the Issuer believes may be material for the purpose of assessing the market risks
associated with Notes issued under the Programme are also described below.
Factors that may affect the Issuer's ability to fulfil its obligations under or in connection with Notes issued
under the Programme
Risks relating to Africa
Economic risks
Emerging markets such as those in Africa are subject to greater risks than more developed markets
African markets are generally considered by international investors to be emerging markets. Investors
in emerging markets in Africa should be aware that these markets are subject to greater risk than
more developed markets. These risks include economic instability as well as, in some cases, significant
legal and political risks. In addition, in a number of African countries structural reforms are still
needed in many sectors, including agriculture, energy and transport.
Economic instability in Africa in the past and in other emerging market countries has been
manifested in many ways, including but not limited to:
(i)
high interest rates;
(ii)
exchange rate instability;
(iii) high levels of inflation;
(iv)
exchange controls;
(v)
wage and price controls;
(vi)
sudden changes in economic or tax policies;
(vii) the imposition of trade barriers; and
(viii) perceived or actual security issues and political instability.
Any of these factors, as well as volatility in the markets for securities similar to the Notes, may
adversely affect the value or liquidity of the Notes.
Accordingly, investors should exercise particular care in evaluating the risks involved in investing in
the Notes and must decide for themselves whether, in light of those risks, their investment is
appropriate. Generally, investments in emerging markets are only suitable for sophisticated investors
who fully appreciate the significance of the risks involved, and prospective investors are urged to
consult with their own legal and financial advisors before making an investment in the Notes.
Investors should also note that emerging markets, such as those in Africa, are subject to rapid change
and that the information set out in this Base Prospectus may become outdated relatively quickly.
Historically, African economies and banking systems have been less stable than those of most Western
countries
The Issuer's lending activities and, as a result, the Issuer's credit portfolio, are concentrated in Africa.
Historically, economies of some countries in Africa have periodically experienced significant volatility,
which has been characterised, in some cases, by political uncertainty, slow growth or recession,
declining investment, government and private sector debt default and restructurings, significant
inflation and currency devaluation. Global economic changes, including oil prices, US dollar interest
rates and exchange rates, and slower economic growth in developed countries, could have a significant
7
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

adverse effect on the economic condition of countries in Africa. In turn, adverse changes affecting the
economies of countries in Africa could have a significant adverse impact on the Issuer's credit
portfolio, including increased loan loss provisions, debt restructurings and loan losses and, as a result,
on the Issuer's growth, asset quality, prospects, profitability and financial condition.
The business, operations and financial results of the Issuer may be adversely affected by the current general
condition in the international financial markets and its effect on African economic growth and trade finance
As a result of the global financial crisis, financial sector dysfunctionality has become an ongoing and
immediate threat for many African economies. Banking systems have come under pressure as (i)
access to foreign currency has become restricted (a situation aggravated by downward pressure on
exchange rates) and (ii) deterioration in the real economic sector threatens the quality of the assets of
banks. The restoration of credit flow both to and within Africa and the continued return of financial
markets to functionality represent critical elements for the ongoing recovery from the global financial
crisis. If such dysfunctionality in the financial sector persists, this could have an adverse impact on
the Issuer's results of operations and profitability.
The official data upon which prospective investors may base their investment decisions may not be as reliable as
equivalent data from official sources in the West
Official statistics and other data published by central banks, governments, and non-governmental
agencies in Africa may be substantially less complete or researched and, consequently, less reliable
than those published by comparable bodies in other jurisdictions. Accordingly, the Issuer cannot
assure prospective investors that the sources from which it has drawn some of the information set out
herein are reliable or complete. African state entities may produce official statistics on bases different
from those used by comparable bodies in other jurisdictions. Any discussion of matters relating to the
Issuer's operations herein may, therefore, be subject to uncertainty due to concerns about the
completeness or the reliability of available official and public information.
Political risks
A worsening of the political climate (including significant changes to social conditions and foreign policies) in
some of the states with which the Issuer has relationships may have a material adverse effect on the Issuer's
financial condition and/ or results of operations
Political factors which could adversely affect the Issuer's business, financial condition, results of
operations and prospects include:
*
regional political instability, including government or military regime change, riots or other
forms of civil disturbance or violence, including through acts of terrorism;
*
military strikes or the outbreak of war or other hostilities involving nations in the region;
*
a material curtailment of the industrial and economic infrastructure development that is
currently underway across Africa;
*
government intervention, including expropriation or nationalisation of assets or increased levels
of protectionism;
*
increased government regulations, or adverse governmental activities, with respect to price,
import and export controls, the environment, customs and immigration, capital transfers, foreign
exchange and currency controls, labour policies and land and water use and foreign ownership;
and
*
arbitrary, inconsistent or unlawful government action.
Crime and corruption could disrupt the Issuer's ability to conduct business and could adversely affect
its business and financial condition. In addition, certain regions of Africa may suffer from geopolitical
conflict. A number of African states have unresolved political differences both internally, with
surrounding countries and/or internationally. Lingering political differences have not, in the Issuer's
experience, adversely affected the Issuer's decision-making capabilities or the functioning of its
operational portfolio to date. However, it is possible that in the future such events could have an
adverse impact on the political stability and economy of the relevant African countries and
consequently on the Issuer's results of operations and financial condition. In addition, weaknesses
relating to certain African legal systems and legislation create an uncertain environment for
investment and business activity, which could affect the Issuer.
8
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

Despite the immunities and privileges afforded to the Issuer in the Establishing Agreement and Headquarters
Agreement, there can be no guarantee that the Issuer's assets and operations will not be affected by
government intervention
Article VIII of the Establishing Agreement states that ``the property and assets of the Issuer wherever
located and by whomsoever held shall be immune from: (a) search, requisition, expropriation,
confiscation, nationalisation and all other forms of seizure, taking or foreclosure by executive or
legislative action; and (b) seizure, attachment or execution before the delivery of final judgment or
award against the Issuer'' and that, without prejudice to such immunity, the property and assets of
the Issuer shall be subject to due legal processes and judicial action taken by ordinary courts of
competent jurisdiction.
In addition, Article VII of the Headquarters Agreement states that the Issuer's headquarters are
inviolable, and that no officer or official of Egypt may enter the headquarters without the consent of
the President of the Issuer.
As at the date of this Base Prospectus, the Issuer has not been subject to any violation of the above
provisions. However, there can be no guarantee that such privileges and immunities will continue
indefinitely, or that they will never be violated. Any alteration, suspension or violation of the Issuer's
immunities and privileges and/or unlawful or arbitrary government action in some African states
could disrupt the Issuer's operations and/or materially adversely affect its financial performance and
results of operations.
Despite the lack of any material impact upon the Issuer as at the date of this Base Prospectus, there can be no
guarantee that the business, operations and financial results of the Issuer will not in the future be adversely
affected by any increase in current levels of unrest in Egypt and other MENA states, or any spread thereof to
other African states where the Issuer operates.
The majority of the Issuer's business is, and will continue to be, concentrated in African countries
outside of the MENA region which, as at the date of this Base Prospectus, have been unaffected by
the current economic and political developments in or affecting the MENA region. This is due to the
fact that the Issuer predominantly conducts its business in its member states and, as at the date of
this Base Prospectus, the only MENA states which are members of the Issuer are Egypt, Tunisia and
Morocco.
As at the date of this Base Prospectus, the Issuer has no exposure to Tunisia and Morocco and its
business and economic activities have not been materially affected by any unrest in Tunisia or
Morocco. The unrest in Egypt, which led to the overthrow of former President Hosni Mubarak in
February 2011, did directly impact the Issuer, by forcing the closure of its Cairo headquarters for five
days and, whilst Egypt is currently experiencing relative stability following that revolution, there can
be no guarantee that Egypt will continue to do so in the future. However, the Issuer did not
experience any material disruption to its operations as a result of this closure, due to having back-up
facilities in Abuja to which the Issuer was able to swiftly and efficiently transfer its headquarter
operations and critical personnel.
Notwithstanding this, it is not possible to predict the occurrence of events or circumstances such as
war, hostilities or political unrest, or the impact of such occurrences, and no assurance can be given
that the Issuer would be able to sustain its current profit levels if adverse political events or
circumstances were to occur in any of the African states in which the Issuer has significant operations
or exposure.
Risks relating to the Issuer
The Issuer's loans are geographically highly concentrated
Whilst the Issuer exists to facilitate, promote and expand intra- and extra-African trade, its lending
activities are concentrated in a relatively small number of countries. As at 31 December 2010,
approximately 69.9 per cent. of the Issuer's outstanding loans with a maturity profile of one year or
more were to borrowers in West Africa. As at the date of this Base Prospectus, the biggest share of
the Issuer's exposure was to Nigeria, albeit on a reduced scale (as at 31 December 2010, Nigeria's
share of exposure was 47 per cent. in comparison to 62 per cent. as at 31 December 2009). As at 31
December 2010, of the Issuer's 20 largest borrowers by outstanding amount, 10 were based in Nigeria
(with a total outstanding amount of approximately US$573.9 million or 35 per cent. of the Issuer's
total outstanding loans), and four were based in Zimbabwe (with a total outstanding amount of
approximately US$186.3 million or 11 per cent. of the Issuer's total outstanding loans).
9
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

The geographical concentration of the Bank's operations is comparable with that of other multilateral
financial institutions operating in Africa and reflects the general concentration of trade and economic
activity in Africa. Moreover, as at the date of this Base Prospectus 47 per cent. of the Issuer's total
amount of outstanding loans to borrowers located in Nigeria are secured by collateral largely located
in Europe, the US, Japan and China. However, notwithstanding these factors, the concentration of
the Issuer's lending activities is accompanied by a certain level of concentration of country risk, which
could have an adverse impact on the Issuer's credit portfolio and, as a result, its financial condition,
growth, prospects, cash flows and results of operations.
The Issuer's subscribed share capital is two-fifths paid up and any failure to successfully call the remaining
instalments may have a material adverse effect on the Issuer's operations
Of the Issuer's total subscribed share capital, two out of five instalments have been called by the
Issuer, in an aggregate amount of US$184.4 million (including share premium) out of overall
subscribed capital of US$413.1 million. The two calls were more than 99 per cent. honoured by the
Issuer's shareholders.
The shareholders are obliged by the Charter of the Issuer to pay an additional US$246.7 million
when called by the Board of Directors of the Issuer (the ``Board''). If the Issuer called for such
capital and such call was not honoured in full, this could have an adverse impact on the Issuer's
financial position.
As a supranational institution the Issuer is not subject to regulatory supervision, including with regard to
capital adequacy
Under Article IX of the Establishing Agreement, the Issuer enjoys freedom from restrictions,
regulations, supervision or controls, moratoria and other legislative, executive, administrative, fiscal
and monetary restrictions of any nature.
The capital adequacy position of the Issuer is controlled and closely monitored by the Board, and is
disclosed in the Issuer's Annual Reports. The Issuer has established a Capital Management Policy
that is based on the maintenance of a capital adequacy ratio that is in line with the recommendations
of the Basle paper entitled ``International Convergence of Capital Measurement and Capital
Standards'' dated July 1988 and prepared by the Basle Committee on Banking Supervision (the
``Basel Committee'') as amended from time to time (the ``Basel Paper'') and the paper entitled
``International Convergence of Capital Measurement and Capital Standards: A Revised Framework''
dated June 2004 and prepared by the Basel Committee, as amended form time to time (the ``Basel II
Paper''). However, the Issuer is not subject to capital requirements by a regulatory body such as a
central bank or equivalent institution and there can be no assurance that the Issuer will continue to
maintain its Capital Management Policy.
To the extent that the capital management strategy elected by the Board differs from expectations of
investors or other market participants, it could result in negative market perceptions of the Issuer.
Dissatisfaction of some of the Issuer's shareholders or a negative market perception of the Issuer with
regard to the use of capital could adversely affect the Issuer's financial position.
Changes in the credit quality of the Issuer's borrowers and counterparties or arising from systemic risk in the
financial system could materially adversely affect the Issuer's financial performance
The Issuer's business is subject to inherent risks regarding borrower credit quality and the
recoverability of loans and amounts due from counterparties. The majority of the Issuer's loans are
made on a dual recourse basis or are supported by collateral located outside Africa. However,
changes in the credit quality of the Issuer's borrowers and counterparties or arising from systemic risk
in the financial system could reduce the value of the Issuer's assets and require increased provisions
for bad and doubtful debts. In addition, changes in economic conditions may result in a deterioration
in the value of security held against lending exposures and increase the risk of loss in the event of
borrower default.
The Issuer's allowances for credit losses could prove inadequate to cover credit losses related to its loans and
contingencies
Determining the appropriate level of allowances for credit losses necessarily requires the Board's and
management's judgement, including assumptions and estimates made in the context of changing
political and economic conditions in the regions and sectors to which the Issuer lends. Consequently,
there can be no guarantee that the Issuer's allowances for credit losses will be adequate to cover
10
c105062pu010
Proof
5:
5.7.11_11:45
B/L
Revision:
0
Operator
ChoD

Document Outline

#1">c105062pu010.pdf
#22">c105062pu020.pdf
#44">c105062pu030.pdf
#58">c105062pu040.pdf
#113">c105062pu050.pdf
#127">c105062pu070.pdf