North Africa

A market that has in previous years promised much but delivered little seems finally to be growing thanks to sovereign issuance

Days after the Tunisian President Kais Saied shocked the world by freezing parliament and boosting his executive power, sources say that investors have little to be concerned about as conversations with the IMF continue to progress. The political saga, which some are calling ‘much-needed’, will not impact Tunisia’s ability to service its debt.

A decade after the Arab Spring erupted in Tunisia, the country has found itself once again in the throes of a political crisis, sending shockwaves through investors. The president’s abrupt seizing of executive power — which some have labelled a coup — poses yet another challenge for the country, though some said there may be buying opportunities on the horizon.

African Export-Import Bank launched a dual tranche dollar bond on Monday morning, with orders exceeding $3bn by midday. Emerging market bank issuers have been especially active in recent month thanks to attractive credit conditions.

As its debt-to-GDP ratio inflates and its public finances come under pressure, some have wondered if Tunisia will succumb to a debt restructuring process. But the governor of the Central Bank of Tunisia, Marouane El Abassi, told GlobalCapital that the country is intent on securing new IMF funding as a prerequisite to entering capital markets.

A consortium of international lenders is funding the development of Egypt’s largest solar plant.

African Export-Import Bank, the multilateral bank headquartered in Cairo, has provided a term loan to OCP Group, a Moroccan phosphate miner and fertiliser producer.

Rating: B2/B/B+

Three African issuers entered debt markets this week and raised cash at competitive levels, despite a difficult external backdrop of debt relief in the region and continued US rates weakness.

Egypt and the Ivory Coast sold bonds on Monday that were heavily oversubscribed and offered little to no new issue concession. The trades, sources said, were evidence that volatility in global markets has had little impact on high yielding debt — though questions linger around investment grade EM issuance.

The Arab Republic of Egypt entered the international bond market on Monday to sell a Reg A/144A multi-tranche dollar deal. Some participants are calling the 40 year tranche “ambitious”, as they say investor demand for duration has been weakening.

UK Export Finance, the UK's export credit agency, has provided its largest ever overseas infrastructure guarantee to support the construction of two new monorails in Egypt. JP Morgan is leading a group of commercial lenders in providing the funding.