Africa Bonds

Grim trading in African bonds this year has not stopped DCM and syndicate bankers predicting that African Eurobond volumes will blast past historical records to hit a new high in 2018. With Angola forging ahead this week with a tap that broke a dollar hiatus of more than a month in the CEEMEA market, they look set to be proved right, writes Francesca Young.

The Republic of Angola has tapped the $1.25bn 9.375% 2048s it sold in May for a further $500m, marking the first dollar bond printed in the CEEMEA market for over a month. The deal was anchored by reverse enquiry.

First Bank of Nigeria is buying back $300m of its outstanding subordinated bonds.

Benin is one step closer to issuing a planned Eurobond after Standard & Poor’s gave it a B+ foreign currency sovereign credit rating on Friday. The West African issuer had sent out a request for proposals (RFP) for a bond back in April.

Scandal-hit retailer Steinhoff International Holdings has asked its creditors for a three week extension to hammer out the final terms of a multi-billion euro debt restructuring.

The Islamic Development Bank has been meeting investors and banks in Europe to explore the possibility of launching its first public sukuk issue in euros. A labelled green sukuk might follow.

Two issuers from the CEEMEA region — Bulgarian Energy Holding and Ecobank Transnational Inc — have mandated banks for new bonds and are embarking on roadshows, breaking the wait-and-see mode that the market had slipped into over the last week.

Ecobank Transnational Incorporated, a pan-African banking group, is the only CEEMEA issuer to have publicly progressed with bond plans this week, setting the roadshow for its debut dollar bond. A syndicate official on the deal said that lead managers are confident of demand, but a rival questioned whether a single-B rated sub-Saharan issuer could reopen the market.

Unrealistic pricing expectations are keeping two EM corporate issuers by the wayside after volatile markets forced Atrium to cancel a tender offer combined with a new issue last week.

African debut issuer Vivo Energy was the only borrower from CEEMEA to make an official mandate announcement this week after sustained weakness in global markets kept seven others on the sidelines, but EM bankers are not predicting sustained periods of stability will return.

African debut issuer Vivo Energy, the sole distributor of Shell products on the continent, is beginning to market a $400m bond this week.

South Africa raised $2bn in a difficult market on Tuesday, after US Treasuries widened unexpectedly at just the moment that the sovereign began marketing its new deal. The resulting sell-off in both South Africa’s curve and the rand meant that the issuer was not able to tighten pricing as much as had been anticipated, and the deal was smaller.