Africa-Press – Tanzania. The Democratic Republic of Congo is planning its maiden sale, while the Republic of Congo this month sold new notes — maturing in 2035 — at a yield of 11.625%, compared with 13.7% when it issued $930m of debt in November.
Kenya and Ivory Coast are the latest African nations to return to the international bond market, seeking to take advantage of lower borrowing costs and a risk-on sentiment to raise funds.
Kenya, which had its credit rating raised by Moody’s Ratings in January, will sell new debt and buy back eurobonds due in 2032 and 2028, according to a statement. Ivory Coast also plans to sell dollar bonds, according to people familiar with the matter, who asked not to be identified because the details aren’t public.
African nations — from Cameroon to Kenya — are rushing to sell foreign-currency debt as a drop in borrowing costs has made additional financing attractive for sovereigns, with emerging-market bond spreads narrowing relative to US Treasuries. Kenya issued two other eurobonds last year.
The announcement is part of the “proactive management of Kenya’s external indebtedness” with an aim to “smooth out the maturity profile,” the government said in the statement on Wednesday.
The Democratic Republic of Congo is planning its maiden sale, while the Republic of Congo this month sold new notes — maturing in 2035 — at a yield of 11.625%, compared with 13.7% when it issued $930 million of debt in November.
The yield on Kenya’s 2028 debt dropped 17 basis points to 6% by 2:45 p.m. in the capital, Nairobi. The rate on its loans due in 2032 fell seven basis points to 7.09%, according to data compiled by Bloomberg.
Ivory Coast’s sale may be about $1.5 billion this year, with around $1 billion of repayments due, according to a note issued Tuesday by Morgan Stanley.
Kenyan authorities announced plans for a eurobond in the range of $1.5 billion to $2 billion and Treasury Secretary John Mbadi said earlier this month that current global market conditions are ideal for issuance.
Kenya’s plans to use proceeds from a debt-for-food security swap to make early repayments on selected eurobonds could raise about $1 billion via a new US DFC-guaranteed instrument.
Proceeds will help repay higher-coupon bonds maturing from 2031, lowering refinancing risks and interest costs for Kenya, according to Morgan Stanley.
“This should be constructive for the curve by reducing overall amounts outstanding,” it said.
Source: Bloomberg
