Cote d'Ivoire $1 bn Eurobond nearly four times oversubscribed
Investors have placed nearly $4 billion in orders for a
$1 billion Eurobond -- sub-Saharan Africa's first in 2015 -- which Ivory Coast
marketed on Tuesday, a government spokesman said.The demand for the bond reflected renewed confidence in
French-speaking West Africa's largest economy following years of turmoil as
well as its relatively healthy prospects at a time when other countries are
struggling with a fall in oil revenue.
"The news is good. Ivory Coast went looking for $1 billion, but the subscriptions reached nearly $4 billion," Bruno Kone told journalists on Wednesday following a cabinet meeting in the commercial capital Abidjan.
"We will at least have the $1 billion planned."
The dollar-denominated bond will be issued with a 12-year
average life at a yield of 6.625 percent, according to lead managers, and will
have three equal redemption payments in 2026, 2027 and 2028.
This will be the second Eurobond in two years for Ivory
Coast, the world's top cocoa producer, after it issued debt of $750 million
last July.
That bond was increased from an initially planned $500
million amid heavy interest from investors.
Even then it received orders more than six times the
issue size just three years after the country defaulted on restructured dollar
debt during its brief 2011 civil war.
Investors scrambling for yield have lapped up bonds from
sub-Saharan African sovereigns in recent years, fuelling a boom in dollar debt
issuance.
However, the International Monetary Fund (IMF) has warned
African countries against rushing to issue new Eurobonds, saying they may face
exchange rate risks and problems repaying debts.
The crash in global oil prices has also taken the shine
off once attractive frontier market economies, and some have predicted a Eurobond
slowdown this year in Africa.
With strong growth approaching double digits and a
relatively diversified economy, analysts including Ronak Gopaldas, head of
country risk analysis at South Africa's Rand Merchant Bank, believe Ivory Coast
will continue to attract investment however.
"Given the lack of issuances this year and oil producers facing financial strain, Ivory Coast presents a very attractive value proposition," he told Reuters.
Ivory Coast is also weighing the option of a first-time
200 billion CFA franc ($346 million) Sukuk this year, according to a calendar
released by the region's debt planning agency last month.
Prime Minster Daniel Kablan Duncan said on 5 February
that no final decision had yet been taken on whether to go ahead with the
bond.
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