The 17th annual pre-export syndicated finance facility for Ghana Cocoa Board (COCOBOD) has been oversubscribed as a total of 28 local and international banks confirm their participation. Initially sourcing for US$1.2 billion, COCOBOD had to increase the threshold to $1.5 billion as the transaction was oversubscribed at $1,834 billion. The facility, which is at an interest rate lower than what was paid last year, will be used to purchase cocoa beans for the 2010/11 season, and secure the assignment of export contracts from overseas buyers. Standard Bank, the parent company of Stanbic Bank Ghana, was one of the joint mandated lead arrangers (MLAs) for the US$1.2 billion transaction along with Credit Agricole, the International Commercial Bank of China (ICBC), the Ghana International Bank and SMBC. As the transaction was oversubscribed at US$1,834 billion, the Borrower increased the facility size to $1.5 billion. A total of 28 banks, including the MLAs, offered ticket sizes ranging from $5 million to US$100 million. "Cocoa is a strategic economic commodity for Ghana both as a significant contributor to Gross Domestic Product (GDP) and as a consistent source of foreign exchange earnings. It is, therefore, necessary for us as a bank to promote and enhance the industry and we are happy to do this," the Managing Director of Stanbic Bank, Mr Alhassan Andani, has said. COCOBOD is the chief promoter of the production, processing and marketing of cocoa, coffee and sheanut in Ghana. Ghana is the second largest cocoa beans exporter in the world after Cote d'lvoire, providing approximately 18 per cent of the world cocoa supply, and earning approximately 40 per cent of its foreign exchange revenues from cocoa. Ghanaian cocoa is of superior quality and commands a quality premium reflecting the excellent growing conditions fermentation and collection care that COCOBOD designs into the supply chain. Farmers are currently paid a minimum of 70 per cent of the price (Free on Board) in local currency, as well as biannual bonus payments. The Head of Corporate and Investment Banking at Stanbic, Mr Kwamina Asomaning, said "Standard Bank continues to be regarded internationally as one of Africa's leaders in Agriculture financing." He said the cocoa sector played a leading role in the country's economy, employing over two million farmers and buying agents, hence the need for the partnership between the bank and COCOBOD to be sustained and continuously improved. Ms Anne-Marie Woolley, the Head of Structured Trade & Commodity Finance, Africa at Standard Bank Africa, said "the Ghana Cocoa Board transaction remains one of the largest structured soft commodity finance facilities in the African market, and it is pleasing to see such strong and continued demand for this premier transaction from international investors, which is a reflection of its long-standing structure and excellent performance track record." COCOBOD and the financing partners will sign the agreement in Accra on Wednesday, September 22, 2010. Source: Daily Graphic