Africa Bonds

Ecobank Nigeria, part of the pan-African banking group Ecobank Transnational, was set to raise dollar debt in the bond market on Wednesday, underscoring investors' appetite for exposure to sub-Saharan Africa.

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 Ivory Coast sought to raise some extra euro cash by tapping bonds in euros on Monday but, with two African sovereigns requesting debt restructuring support from the G20 over the last week, some market participants have begun to question the continent's borrowers.

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.

Zambia, which months ago became Africa’s first sovereign default since the pandemic started, has requested debt treatment under the G20’s Common Framework. That makes it the third African sovereign to request restructuring support under the guidelines, which were first announced in November.

Ecobank Nigeria, a member of the pan-African banking group Ecobank Transnational, has mandated banks to arrange a dollar bond after a hiatus from the market.

Ethiopia announced on Monday its intention to restructure its debt under the G20’s Common Framework. However, the statement has been criticised for its lack of clarity. Market participants say the G20 must urgently confirm how creditor negotiations will take place.

HSBC has created a dedicated sustainable and transition finance team for the Middle East, North Africa and Turkey, as the region tries to make its economies more sustainable.

Junk-rated emerging market sovereigns Benin and Oman sold bonds this week, with market participants saying their new issue premiums were minimal. However, bankers think total activity across CEEMEA over the last two weeks has been “underwhelming”.

Rating: —/B+/B

Turkey’s Yapi Kredi, Russia’s Credit Bank of Moscow and Banque Ouest Africaine de Banque Ouest Africaine de Développement have all approached investors this week to sound out interest in hard currency bonds.

The Sultanate of Oman's return to debt markets is proof to some that the market is wide open for high yielding emerging market issuers. The sovereign mandated banks for a dollar deal as investors, hunting for yield, appear undeterred by volatility in the US rates market.