Africa Bonds

It was a rough day for stocks on Wednesday, but a great day for equity capital markets, with two convertible bonds launched and priced — the first since the UK’s vote to quit the European Union was revealed on June 24. They came on top of a roaring reception for Melrose Industries’ announcement of a £1.7bn rights issue for an acquisition in the US.

African Bank is gathering responses this week for a two tier buy-back of its outstanding dollar and Swiss franc debt in a bid to reduce its interest expense. The bank was bailed out by the Reserve Bank of South Afica in April.

Mozambique’s battered sovereign bonds dropped to new lows this week after the IMF warned its public debt is at high risk of distress after concluding a fact finding mission to the country last Friday.

Developing market debt has emerged as a stronghold as markets continue to adjust to the fallout from the UK’s EU referendum last week. While panic hit spreads at first, fund flows quickly returned and credit across the CEEMEA universe rallied.

Sub-Saharan Africa’s credit markets are benefiting from Britain’s decision to leave the EU as well as a more dovish stance from the US Federal Reserve, with bonds rallying to new lows, according to EM specialists.

Mozambique’s battered sovereign bonds dropped to new lows on Monday after the IMF warned its public debt is at high risk of distress after concluding a fact finding mission to the country on Friday.

USAID has extended a $500m guarantee that will enable Tunisia to access affordable financing from the international capital markets, after plans for standalone access were put on hold in April.

Resolution to Mozambique’s latest debt problem is likely days away as a representative from the country's finance ministry confirmed that the government is in close negotiations with VTB Bank over a missed loan repayment.

Mozambique has not defaulted on its loan obligations as it has not received a notification from VTB that Mozambique Asset Management has missed a repayment on state guaranteed debt, the Ministry of Finance told GlobalCapital on Friday.

Reports that Mozambique will not honour a $178m loan interest repayment on Mozambique Asset Management debt due next week have prompted a further fall in Mozambique’s sovereign bond trading.

Afreximbank printed a bond of superlatives on Tuesday, achieving its biggest ever book and largest trade. But bankers on and off the deal debated whether the African supranational priced the note flat to or inside its curve.

Afreximbank printed a bond of superlatives on Tuesday, achieving its biggest ever book and largest trade. But bankers on and off the deal debated whether the African supranational priced the note flat to or inside its curve.