Africa Bonds

Tunisia launched a $500m seven year bond this week with a full guarantee from USAID, as part of US efforts to help the country through its transition to a new democratically elected government.

The African sovereign bond market has come of age, with debt bankers expecting this year’s successes to encourage debut transactions, as well as more regular issuance and diversification into euros from established names. Senegal’s seven times subscribed $500m 10 year bond this week was just the latest deal to surprise bankers, with an aggressive starting point and even tighter finish. But the current open mouthed surprise at what African sovereigns can achieve could soon be forgotten as deal after deal attracts a huge order book despite slim new issue concessions. Steven Gilmore reports.

Senegal sold a seven times subscribed $500m 10 year bond this week, at a yield well inside what bankers away from the deal saw as a surprisingly aggressive starting point. But surprise at what Africa sovereigns can achieve is becoming less justifiable as deal after deal attracts a huge orderbook despite slim new issue concessions.

Ecobank Nigeria on Thursday contributed to the barrage of Africa bond mandates, picking leads for a debut subordinated dollar bond. The bank finishes a roadshow on August 1, and the appetite evident in recent Africa sovereign deals means a debut sub deal in the middle of summer is by no means off the cards, said bankers away from the bond.

Ecobank Nigeria on Thursday contributed to the barrage of Africa bond mandates, picking leads for a debut subordinated dollar bond. The bank will finish a roadshow on August 1, and the appetite evident in recent African sovereign deals means even a debut sub deal in the middle of summer is by no means off the cards, said bankers away from the bond.

African Export-Import Bank launched a $500m five year bond that traded up in the secondary market after being priced on Tuesday. The borrower had to contend with a downgrade from Standard & Poor’s in the run up to the deal, but still managed to price a three times subscribed bond with respectable new issue premium.

Nigerian oil and gas company Seven Energy has joined the burgeoning family of Africa high yield borrowers, picking banks for a benchmark sized debut dollar deal. An African mining corporation is also eyeing the high yield market, and bankers are expecting a steady procession of corporate deals from the continent throughout the rest of this year.

African Export-Import Bank’s $500m five year bond was trading up in the secondary market on Wednesday. The borrower had to contend with a downgrade from Standard & Poor’s in the run up to the deal, but still managed to price a three times subscribed bond with respectable new issue premium.

Senegal’s initial price thoughts for a new 10 year benchmark bond on Wednesday surprised bankers away from the deal, who felt the sovereign had started with an over aggressive level. But the lead managers countered there was no push back from investors, and that Senegal’s secondary curve was by no means the sole reference point for pricing.

African issuers have made sure CEEMEA supply has not suffered in the wake of new US sanctions against Russia. Tunisia, Senegal and Africa Export Import Bank are supporting primary supply, while the continent’s high yield corporate pipeline is growing.

Islamic bankers don’t need new excuses to travel to the world’s sunnier climes, but meetings in Mauritius next to its pristine coral sand beaches could soon become a feature of the market — and not just for obvious reasons.

African Export-Import Bank (Afrexim) saw a stable window for a new benchmark bond on Tuesday morning, and opened books on a five year dollar transaction.