Namibia Government to Start Marketing Eurobond in U.S. Next Week

  • Barclays, JPMorgan, Standard Bank arranging investor meetings
  • Deal would be Namibia's first since $500 million debut in 2011

Namibia will meet investors in the U.S. next week to market its first Eurobond sale since a debut $500 million deal in 2011.

Barclays Plc, JPMorgan Chase & Co. and Standard Bank Group Ltd. are arranging investor meetings for a dollar security, according to a prospectus seen by Bloomberg, which didn’t disclose the size or maturity of the deal.

Officials from the southern African nation, including Minister of Finance Calle Schlettwein and Titus Ndove, director of financial markets at the central bank, will travel to Los Angeles on Oct. 19, New York on Oct. 20 and Boston the following day, said an investor who declined to be identified. A European roadshow will follow, the investor said.

It would be the fifth Eurobond from sub-Saharan Africa this year, with Gabon, Ghana, Ivory Coast and Zambia having sold $3.75 billion of dollar debt between them. Issuance from the region has fallen from 2014, when it reached a record $8.5 billion, as investor confidence dims amid falling growth rates and depreciating currencies, which make foreign debt more expensive to pay off.

Namibia, which is rated Baa3 by Moody’s Investors Service and BBB- by Fitch, both at the lowest investment grade, will use the bond to boost reserves, finance development of power, water and other infrastructure and fund education initiatives, according to the prospectus.

Yields on the nation’s $500 million bond due in Nov. 2021 fell 1 basis point to 4.65 percent at 9:23 a.m. in Windhoek, the capital. The Eurobond has a lower yield than that of any other country in sub-Saharan Africa except South Africa.

Schlettwein didn’t immediately respond to a request for comment sent by e-mail. He told lawmakers in Windhoek on Oct. 15 that he planned to raise more financing from international markets to make up for a likely decline in revenues from the Southern African Customs Union, which Namibia is part of, due to weakness in the South African economy.

Namibia is one of the continent’s richest economies, with a gross domestic product per person of $5,720, according to the World Bank. That’s almost double the level for Nigeria and four times that of Ghana.

Economic growth will accelerate to 4.8 percent this year from 4.5 percent in 2014, according to the International Monetary Fund. The country “remains reliant on diamond and uranium mining and manufacturing, which have experienced price and supply volatility in recent years, as well as imported power sources,” according to the prospectus.

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