Bond debts increasingly successful in Africa

Mar 29, 2012

African states and development institutions are increasingly resorting to bond debts to finance their activities, thanks to the recent success of these operations across the continent.

The results of the West African Development Bank's (WADB) bond debts, which have just been published, surpassed all expectations by leveraging $87 million (€65.5 million) instead of the $80 million anticipated, Le Griot newspaper reports,

Bond were available at the relatively low price of FCFA 10,000 per unit, refundable over seven years, with an interest rate of 5.95 percent.

Several bond debts issued in Africa have been successful over the past few months, which helped African states and development institutions to leverage funds to pursue their activities, such as small to medium-sized enterprise financing or infrastructure.

The recent bond debt from Benin had a cover rate of 128 percent and Namibia recently had a successful first bond issue.

It was oversubscribed five-and-a-half times and demonstrated the appetite for liquid African paper, Head of Debt Capital Markets at Standard Bank Florian von Hartig told Reuters.

He said 2012 is likely to be an active year for African issuance, as "economies in Africa have been doing very well at times when the so-called developed world has experienced zero growth or even recession".ADNFCR-2976-ID-801329000-ADNFCR