Africa Will Match 2014 Record for Eurobonds, Allen & Overy Says

African issuers, which set a record for Eurobond sales last year, will keep up the momentum of international debt offerings in 2015 to capture low borrowing costs, Philip Smith of Allen & Overy LLP said.

“We expect that Africa will have the same volume of foreign-bond sales this year as last year, if not slightly higher,” the law firm’s London-based partner Smith, who advised Senegal on its dollar-bond sale in July, said by e-mailed comments yesterday. “African issuers may continue to benefit from low interest rates.”

Ethiopia, Kenya, Ghana, Senegal, South Africa and Ivory Coast helped boost the sales of international bonds from the continent to at least $16 billion last year. Issuers took advantage of historically low global borrowing costs as they invested in infrastructure from roads to electricity. Ethiopia, with the smallest GDP for a sovereign issuer, raised $1 billion in a debut sale last month.

Some countries that earlier went for private placements may opt to “create a public yield curve to stimulate domestic issuers like banks and corporates” this year, Smith said. South Africa may see more deals like the first-time issue from MTN Group Ltd. over the next 18 months, he added. More company bond sales may also come from Nigeria, Kenya and Morocco.

Johannesburg-based MTN, Africa’s largest wireless operator, raised $750 million in November from a 10-year Eurobond to fund expansion in new markets. Ecobank Transnational Inc.’s unit in Nigeria sold $200 million of 2021 notes in August. First Bank of Nigeria Ltd. raised $450 million in July, and Access Bank Plc sold $400 million in 2021 notes in June.

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