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Zambia attracted more demand from investors in Africa’s first dollar-bond sale of 2014 than the $1 billion it offered, according to the Finance Ministry of the continent’s second-biggest copper producer.
The proceeds will be used for transportation and energy infrastructure, acting minister Edgar Lungu said in a statement posted on the Lusaka-based department’s website. Details on the subscription rate or the coupon weren’t given. Zambia sold 10-year bonds with an 8.5 percent coupon, according to a person with knowledge of the offering, who asked not to be identified because they weren’t authorized to speak publicly.
“The second bond just like the first was significantly oversubscribed -- an expression and affirmation of the confidence the international investor community has in Zambia,” said Lungu, who is also the country’s defense minister.
Zambia, which relies on copper for about 70 percent of its export earnings, sold its first dollar bond in 2012 at a coupon of 5.375 percent. It attracted bids worth about $12 billion, the ministry said at the time. Deutsche Bank AG and Barclays Plc (BARC) led both sales.
Yields on the debut notes due September 2022 dropped 26 basis points, or 0.26 percentage point, to 7.527 percent today, the lowest since Jan. 7 on a closing basis. They’ve fallen 80 basis points since reaching a record high of 8.331 percent on March 20.
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