Conversion Guidelines

Interest rate conversion

An FFL borrower may fix, unfix and re-fix the base interest rate for all or part of the disbursed and outstanding loan amount. This conversion feature may be exercised by the borrower at any time during the life of the loan. The conversion of the base interest rate may be structured for the full or remaining maturity of the loan or for a shorter tenor.  In other words, the borrower may request interest rate conversion for a period of time shorter than the full or remaining maturity of the loan.  The Bank’s funding margin will remain variable up to the maturity date of the loan.

Interest Rate Caps and Collars

Caps (set an upper limit) and collars (set upper and lower limits) will be available for FFLs with floating base rates, for all or part of disbursed and outstanding loan balances. The borrower may choose to cap or collar the base interest rate as the Bank’s funding margin will not be subject to interest rate caps or collars. The terms of the interest rate caps or collars will reflect the terms and cost of the Bank’s offsetting transaction(s) and may be applied for the remaining maturity of the loan. The Bank may also accept requests for interest rate caps for a period shorter than the full maturity of the loan.

Currency Conversion

FFL borrowers may change the lending currency of all or part of undisbursed and/or disbursed loan amounts during the life of the loan.  The new loan currency will apply for the remaining/full maturity of the loan or for the chosen shorter tenor upon acceptance by the Bank of such request.

  • Conversion for undisbursed loan balances – At any time after signing of the loan agreement, borrowers may request for conversion of the lending currency for all or part of undisbursed loan balances to any of the Bank’s major lending currencies (EUR, JPY, USD and ZAR).. After disbursement of the converted amount, the default floating base interest rate and funding margin of the new lending currency selected by the borrower will apply.
  • Currency conversion for disbursed loan balances – All or part of the disbursed and outstanding loan amounts may be converted into any of the Bank’s major lending currencies (EUR, JPY, USD and ZAR) at the borrower’s request, at any time during the life of the loan

Local Currency Conversion

In addition to the Bank’s designated major lending currencies, EUR, USD, JPY and ZAR, and subject to market conditions (availability of local currency funding opportunities or swap opportunities), the Bank financing may be available in any African local currency designated as lending currency of the Bank, on a best efforts basis.  Currently available African local currencies include: Egyptian Pound (EGP), West African Franc CFA (XOF), Central African Franc CFA (XAF), Ghanaian Cedi (GHS), Nigerian Naira (NGN), Kenyan, Tanzanian and Ugandan Shilling, (KES, TZS and UGX respectively) and Zambian Kwacha (ZMK).  It should be noted that the Bank may be unable to offer fully deliverable transactions for local currency conversions and may therefore limit offerings to non-deliverable conversions.

Conversion Pricing

   CONVERSION

FFL TRANSACTION FEE

  Interest Rate Conversion:

   Initial Rate fixings for up to the full maturity of the loan    for amounts up to the outstanding loan amount

  Additional rate fixing/unfixing

 

 

0 *

3 bps per annum

 

  Currency Conversion

  Of undisbursed loan amounts

  Of disbursed loan amount

   Local Currency Conversion

 

3 bps per annum

4 bps per annum

2 bps p.a **

   Interest Rate Caps & Collars

6.25 bps***

Except for interest rate fixing described above:

(**)  For a Local Currency Conversion, an annual fee of 0.02% of the outstanding principal hedged amount will be payable by the Borrower.

(***)  Conversion Fees are expressed as percentage of the principal amount involved and are a one-time fee.

These fees are non-refundable and are applicable for each individual transaction.  Bank management may review transaction fees, from time to time.