Africa Bonds

South Africa priced 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.

The Republic of South Africa started execution on its first ever sukuk on Tuesday. Debt bankers away from the bond saw the starting point 30bp back of the sovereign's conventional curve. But syndicate officials on the deal said the sukuk had started 20bp wide of where a conventional note in the same tenor would be priced.

The South Africa sukuk might well go fine, but that doesn’t mean it was a good idea. The country is in no position to pay away basis points for spurious long term diversification benefits, and has no ambition to build a domestic Islamic finance market.

The South Africa sukuk might well go fine, but that doesn’t mean it was a good idea. The country is in no position to pay away basis points for spurious long term diversification benefits, and has no ambition to build a domestic Islamic finance market.

The Republic of South Africa started execution on its first ever sukuk on Tuesday. Debt bankers away from the bond saw the starting point 30bp back of the sovereign's conventional curve. But syndicate officials on the deal said the sukuk had started 20bp wide of where a conventional note in the same tenor would be priced.

The Republic of South Africa has set the tenor on its prospective debut sukuk, and plans to release initial price thoughts early this week. The borrower’s conventional bonds widened 5bp Monday, which some debt bankers away from the deal ascribed to the National Treasury’s plan to close the funding gap for state electricity provider Eskom. But others argued it was in line with wider market weakness.

Ghana's lead managers defended what looked like a low multiple of oversubscription on the sovereign's Thursday $1bn bond deal as they released the final book size, pointing to the quality of the orders received.

The Republic of Ghana returned to the international bond markets on Thursday, pricing a $1bn 2026 amortising bond to yield 8.25%, despite worries about the country's fiscal position and a weakening currency.

The Central Bank of Tunisia has hired Nomura to arrange a yen deal. The deal will be backed by the Japan Bank for International Cooperation, said a source close to the deal.

The Republic of Ghana has set dates for a European and US roadshow for its new Reg S/144A Eurobond.

The Republic of South Africa has scheduled investor meetings in September for its debut international sukuk, bringing closer to reality its plans to be among an expected flurry of deals before the end of the year.

Ghana is expected to undertake a liability management exercise on its $750m 8.5% 2017s alongside a new Eurobond it is planning for September, said a banker away from the deal.