Africa Bonds

Bayer, the German life sciences group, picked Tuesday night to launch the first part of its $19bn equity financing for its $66bn takeover of Monsanto. Bayer's deal comes as equity markets are revitalised by the new conviction that Western policy is shifting to reflation.

In the midst of an aggressive EM bond rout, Egypt was given a much needed boost after the International Monetary Fund approved a three year $12bn loan on Friday.

Egypt’s return to the Eurobond market could be postponed until next year after its finance ministry raised a further $2bn of funding from international banks.

South African Eurobonds rallied a half to three-quarters of a cash point this week after fraud charges against finance minister Pravin Gordhan were dropped on Monday. Now both the sovereign and FirstRand Bank are hitting the road.

Mozambique’s 2023 bond rose five cash points on Wednesday after a government official was reported to have said that principal reductions would not be imposed on creditors, but experts are sceptical and one said the comments could have been “lost in translation”.

October was the busiest month for CEEMEA borrowers on record, with $37.5bn of new bonds issued. Even if Saudi Arabia’s $17.5bn mega deal was not included, volumes were way above the five year average of $14bn. But as the US elections approach, primary issuance has wound down.

South African assets rallied on Monday after its National Prosecuting Authority (NPA) dropped fraud charges against embattled finance minister Pravin Gordhan, setting a stronger tone for FirstRand Bank to engage with investors next week.

Mozambique’s now infamous government 2023s sank to their lowest ever cash price this week, bottoming out at 57.5 cents as investors continue to digest the news that they will not be paid back in full. VTB Bank, one of the loan providers, has claimed to have been misled by the government.

Abu Dhabi airline Etihad Airways has launched a Schuldschein for €150m denominated in euros and dollars, the first ever for a Middle East borrower, according to one market participant.

South Africa’s Cell C is expected to print its debut dollar bond on Wednesday, a secured note which will be appeal more to high yield buyers than emerging markets investors, according to an EM buy-side analyst.

The finance minister of Mozambique met investors in London on Tuesday to discuss a debt restructuring and disclosed that it had “no capacity to pay” back investors.

While Access Bank safely landed its dollar Eurobond last week, the outlook for Nigerian banks seeking new loans is cloudy.