The Liquidity and Sustainability Facility (LSF), a funding channel designed by the United National Economic Commission for Africa (ECA) in association with the African Export-Import Bank (Afreximbank), completed its first repo transaction last month to align with the COP27 summit.
The repo trade, conducted with Citi for US$100 million, aims to bring the advantages of a well-developed repo market to Africa.
This aims to enhance the liquidity of a basket of sovereign eurobonds, with issuers including Angola, Egypt and Kenya, and to encourage investments related to the UN’s Sustainable Development Goals (SDGs) in Africa.
LSF indicates that the trade employs a triparty platform designed for LSF by BNY Mellon and it is now working to sign up new clients to the platform, including two large European and US-based private fixed income investors.
Commenting on this inaugural repo transaction conducted on 14 November, LSF chair Vera Songwe says: “As the originator of the idea and working for over two years to see the LSF happen, [This] exemplifies a pragmatic and concrete illustration of what Africa can do for itself when taking the initiative to build the modern financial infrastructures that will boost its green recovery and foster sustainable investments in Africa.
“This is an important edifice for emerging markets generally and we hope we can grow the facility to support many more countries especially in these challenging times. It is a privilege to be supported in that endeavour by such leading international financial institutions.”
Intertrust Group indicates in a statement released today that it played an important role in facilitating this repo transactions, offering capital market solutions including corporate governance, administration, and agency services.
Anne Flood, Intertrust Group’s head of capital markets Ireland, has joined the LSF board. She says: “I am honoured to join the board and look forward to working with an accomplished team of fellow directors and the Intertrust Group capital markets team to provide the highest level of corporate governance, administration and agency services.”
Intertrust Group director for capital markets Brid McNamara says: “We are proud to support the LSF in achieving its goals: bringing the benefits of a well-developed repo market to the African continent, incentivising green and SDG-related investments and contributing to the enhancement of the liquidity of African sovereign bonds.”
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