AfDB gives $147m debt to the MCB

The African Development Bank Group has approved a $147 million subordinated debt to the Mauritius Commercial Bank Ltd (MCB) to enhance its capital base and increase loan growth in sectors such as renewables, manufacturing, healthcare, SMEs, and more. The debt will be issued in the form of a Basel III Tier 2 compliant bond by MCB, which is one of the five banks classified as a Domestic Systematically Important Bank (DSIB) by the central bank of Mauritius. This financing will allow MCB to expand its loan book, benefiting several Mauritian and African corporates and SMEs, and is expected to create thousands of jobs within Africa over the next 5 years.

MCB has recently expanded its footprint into several African countries and is deepening its intra-African trade financing activities, which align with the African Development Bank’s High-5 strategic targets, including the integration of Africa. The collaboration between MCB and AfDB has spanned several decades, and this funding instrument will finance high-impact projects in the Sub-Saharan and Indian Ocean regions.

The bonds will be MCB’s first capital markets operation on a stand-alone basis, and it will also be the first Basel III compliant bond to be issued in the Mauritius capital markets. MCB’s Chief Executive Officer, Alain Law Min, said that this first Basel III Tier 2 bond issuance is a landmark transaction for MCB, and the success of this placement reflects the international recognition of the Bank’s strong fundamentals, its investment grade ratings and investor confidence in MCB’s growth potential.

The Director General for Southern Africa at the African Development Bank, Leila Mokaddem, said that this support underscores their long-standing relationship with MCB, which dates back to 2002, and Ahmed Attout, the African Development Bank Acting Financial Sector Director, stated that the Bank was pleased to expand its relationship with MCB, which is a truly pan-African financial institution.

MCB is one of the oldest banks on the continent and operates under a universal banking model that incorporates retail banking, business banking, corporate and institutional banking. It offers a wide range of banking services to individual clients, SMEs (including women-owned businesses), corporates, and other African banks through correspondent banking relationships to facilitate international trade financing activities. MCB focuses specifically on providing specialised finance solutions, including structured commodity trade financing and project financing, especially within the power and infrastructure franchise.