Rawbank May Use First Moody’s Rating for Congo Bank to Sell Bond

Rawbank, Democratic Republic of Congo’s biggest lender, said it may use the credit rating it received last week from Moody’s Investor’s Service to sell an international bond.

“The conditions seem ripe for Rawbank to consider conducting its first international bond issue, which would be a first for a corporation based in the Democratic Republic of Congo,” co-founder and Chief Executive Officer Thierry Taeymans said in an e-mail to Bloomberg News on July 25.

Rawbank was assigned a B3 local-currency deposit rating and a b3 standalone baseline credit assessment, Moody’s said on July 24. That was in line with the B3 sovereign rating given to Congo last September, the ratings company said.

Rawbank, founded in 2002 by Taeymans and India’s Rawji family, is the first bank in Congo to receive a credit rating from Moody’s. The lender, with 36 branches in a nation the size of western Europe, will tap increasing foreign investor interest, said Director of Corporate Strategy Mustafa Rawji.

“With an increase of foreign direct investment into Congo, on the back of strong economics growth, a rating provides us with a tool to access longer-term funding in international capital markets,” Rawji said in a phone interview from the capital, Kinshasa.

The International Finance Corp. said in May that it would offer a $15 million loan to Rawbank to support lending to small and medium-sized businesses and female entrepreneurs in Congo. The country’s biggest bank by deposits and assets last year became the first lender to make Congolese francs available at automated teller machines and introduced a debit card for clients doing business in China.

Elevated Risks

Congo is the world’s sixth-largest producer of copper and the biggest of cobalt. The central African nation has been ruled by President Joseph Kabila since he took office 10 days after his father, Laurent Kabila, died in January 2001. The country is scheduled to hold presidential elections in 2016 and opposition parties have said Kabila may change the constitution to secure a third term, which is currently illegal.

Congolese security forces last week repelled an attack by about 20 men, some armed with guns and others with machetes, at the main military barracks in Kinshasa, and deployed tanks to secure the installation, the government said. At least seven attackers and one soldier died in the assault on Camp Tshatshi on July 22, while the city’s N’djili Airport was evacuated.

“The primary driver for Rawbank’s ratings is Moody’s assessment that the bank’s credit profile is closely linked to that of the sovereign as a result of the bank’s high credit concentration to government and public-sector exposures,” Moody’s said. “Rawbank also displays elevated credit risks stemming from the bank’s high corporate loan concentrations and the fragile domestic operating environment.”

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