Africa Bonds

BRE Bank and African Bank both sold Swiss franc debt this week, heralding the return of triple-B credits to the currency after an absence of several months. BRE went first, making its debut in the Swiss franc market on Wednesday, appealing to retail investors and asset managers starved of high yielding paper.

African Bank, the South African lender, sold its third ever Swiss franc bond on Thursday morning, pricing a small retail-focused deal at the tight end of guidance.

The Nigerian state of Osun is offering NG10bn ($62m) of sukuk al ijara to investors, in the country’s first ever sukuk sale.

The CEEMEA market had a strong opening on Monday morning, with buyers a clear majority in the secondary market and last week’s primary transactions performing well. But borrowers are still opting to hold off until after the Federal Open Market Committee meeting on Wednesday.

The Republic of South Africa printed a well oversubscribed $2bn global bond on Monday, although bankers on and away from the deal disagreed on the new issue premium paid. The initial secondary market performance was stable — arguing in favour of the leads’ strategy. But in less than 48 hours the bonds rose four cash points and bids for South African corporations and financials also improved, which the bookrunners struggled to explain.

Russia and South Africa have given their sovereign peers a superb demonstration of the deal sizes on offer in the CEEMEA market. The Russian Federation launched a long awaited multi-tranche bond taking $6.96bn across euros and dollars, while South Africa printed a well oversubscribed $2bn deal. Bankers hope the two transactions will encourage the long line of countries considering deals to follow, but both deals also made clear the need for big new issue concessions.

The Republic of South Africa pulled in $7.4bn in orders for a $2bn 12 year global bond on Monday. Debt bankers on and away from the deal disagreed on the new issue premium paid, but the bond’s performance in the secondary market argued in favour of the leads’ strategy.

South Africa opened books on a 12 year dollar deal on Monday morning, with initial price thoughts offering what investors said was a large premium.

After months of unprecedented local currency bond fund inflows courtesy of international investors, that market is now under pressure amid rising US Treasury rates and a sudden aversion to EM risk. These markets will not be dampened by foreign fiscal policy forever though, and when rates settle and stability returns some sovereigns will be far better placed to draw cautious buyers back into their local markets.

Islamic finance will remain part of Egypt’s economic landscape, according to the country’s finance minister Ahmed Galal.

There is just over one week left to add your votes in this year’s IFIS poll of Islamic market excellence. The deadline for voting is Monday, August 19, with winners announced at the IFIS Islamic Finance Inaugural Dinner 2013 on September 18 in Dubai.

Global sukuk issuance in 2013 has lagged 2012’s record levels by some way, with the gap growing wider in recent months. But a strong end to the year, led by large sovereign deals, could help reduce the shortfall.