Africa Bonds

The Central Bank of Tunisia printed a ¥50bn 10 year bond on Wednesday from a ¥110bn book. The note was priced at par with a coupon of 1.61% to give a spread of 90bp over swaps — a much wider spread than Turkey paid for its own Japan Bank for International Cooperation-backed deal in September.

Seven Energy made a successful comeback in testing conditions on Thursday. While it certainly paid for the privilege, having already secured strong anchor orders before proceeding, the trade signals that the miserable high yield market may be improving.

Seven Energy is about to make it second time lucky, as it readies to price a seven year non-call four offering on Thursday.

Nigerian oil and gas firm, Seven Energy is out with guidance for its comeback bond. The leads have set a wider guidance than was offered in July, when the borrower had to abort a deal, and will be hoping that the poor performance of this week’s markets doesn’t blight its return.

Nigerian oil and gas firm Seven Energy is returning to the bond market after postponing a deal in late July, this time in a stronger position with commitments from two supranationals. It bodes well for a deal that a pack of prospective Africa corporate borrowers will be watching carefully, said bankers on the deal.

Nigerian corporate Seven Energy is returning to market with a seven year non-call three deal, which it had to abort in late July because of a downturn in the CEEMEA market. But new commitments from two public sector entities means Seven is in a stronger position than before, which bodes well for a deal that a pack of prospective Africa corporate borrowers will be watching carefully, said bankers on the deal.

The Republic of South Africa printed a debut sukuk this week, which represented a tightly priced first foray into a new investor base for the issuer and a benchmark for the country’s corporates to follow, said bankers on the deal. But their counterparts away from the transaction questioned the claims of tight pricing and pointed to what they saw as a sour performance in the secondary market.

A fresh wave of sukuk this week made September the biggest month ever for international sales of the product. But debut deals from Goldman Sachs and the Republic of South Africa have implications that go far beyond issuance records. These landmark transactions have paved the way for Western firms and African issuers to add their names to the expanding market.

The Republic of South Africa printed a debut sukuk this week, which represented a tightly priced first foray into a new investor base for the issuer and a benchmark for the country’s corporates to follow, said bankers on the deal. But their counterparts away from the transaction questioned the claims of tight pricing and pointed to what they saw as a sour performance in the secondary market.

South Africa printed the continent’s first international sukuk deal on Wednesday, offering a valuable benchmark for South African corporates, state-owned enterprises and other African sovereigns. South African SOEs like Eskom are among the borrowers considering sukuk as a new funding tool, but SOEs need the South African authorities to amend its tax policy in order to pave the way for follow on sukuk.

South Africa is set to price a $500m debut sukuk to yield 3.9% on Wednesday afternoon — a landmark deal in a continent enjoying an influx of Islamic money. But as with other inaugural sukuk offerings there was no hint of consensus over the sukuk’s concession to the conventional curve.

In the CEEMEA bond market the star product of the week is sukuk with South Africa, Luxembourg and Goldman Sachs all working on deals.