Africa Bonds

Sovereign mandates are starting to trickle through in CEEMEA as borrowers ready themselves for September. Bahrain has picked five banks to manage a dollar transaction and the market is waiting for updates from Egypt and Nigeria.

A slip-up by Ghana last week has done little to derail investor appetite for African credit and with the low rate environment set to continue, bankers expect no letup in the voracious bid for Africa, which is good news for those sovereigns already lining up trades.

The deadline for responses to Egypt’s RFP passed at noon in Cairo on Thursday with a decision on the mandate expected as soon as early next week, said one DCM banker.

Ghana bought back $100m of its outstanding 2017s on Tuesday after postponing a new issue last week which was due to finance a much larger buy-back. Ghana’s bonds have since rallied, bringing the country’s borrowing costs down substantially, according to a fixed income investor.

CEEMEA primary markets have finally become a victim of the summer heat but there’s no snoozing on the beach for syndicate bankers. Planning for the second half of the year has already started in earnest.

Payment of the overdue coupon and principal on the Republic of Congo’s $478m 2029s has sparked a rally in the sovereign’s bonds, but an investor said he was still uncertain whether the default was the result of an administrative error or symptomatic of a deeper problem with the country’s finances.

Nigeria sent out a request for proposals on Monday for a $1bn bond and has asked for responses by September 19.

Republic of the Congo’s bonds dropped four cash points since Tuesday as all three ratings agencies downgraded the country this week. The downgrades follow the sovereign's default last week on a principal and coupon payment for its only international bond.

Investor appetite for African risk seems to have found its upper limit as even the EM bulls would not stretch to buying Ghanaian sovereign risk at the asking price on Thursday, writes Virginia Furness.

Republic of Ghana postponed its dollar bond issuance on Thursday after pricing moved against the issuer. It will proceed with a $100m buy-back of its 2017s but there is confusion about the outcome of a parliamentary vote on Tuesday.

Public sector dollar flow picked up on Wednesday after a quiet start to the week, as World Bank brought a four year benchmark and Tunisia sold a bond backed by the US government.

Egypt published a request for proposals for a new dollar bond on Wednesday as it works towards an agreement with the International Monetary Fund.