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HomeNewsIvory Coast Tests Eurobond Market for Locked-Out African Nations

Ivory Coast Tests Eurobond Market for Locked-Out African Nations

(Bloomberg) — Ivory Coast began the process of marketing a eurobond, testing a market that’s been closed to borrowers from Sub-Saharan Africa for nearly two years.

The Western African nation mandated BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co., Societe Generale SA and Standard Chartered Plc as joint lead managers to arrange a day of global marketing including an investor call on Monday, according to information from a person familiar with the matter, who asked not to be named because they’re not authorized to speak about it.

Subject to market conditions, two bonds will go on sale, according to a preliminary outline of the offering: a sustainability bond with an 8-year weighted average life (9-year final maturity), and a conventional bond offering with an expected 12-year weighted average life (13-year final maturity).

In addition, the world’s largest cocoa producer is also planning a tender offer for its outstanding 5.125% euro notes due 2025 and a $300 million capped tender offer of its outstanding step-up bonds due 2032. The tender offer is conditional on a successful closing of the new offering.

Yields on the country’s eurobond due July 2024 fell 67 basis points to trade at 7.97% as of 10:50 a.m. in London.

Nick Eisinger, co-head of emerging-market fixed-income active at Vanguard Asset Services, said the nation was one of the few African names able to issue under present conditions. Investors generally like the issuer due to a strong track record for reform and its ability to access a wide range of funding across commercial and concessional sources, he said.

“It is also a dollar issue which is important for dedicated EM investors as it will come into the JP EMBI index and thus should generate better liquidity – we applaud the fact the authorities have decided to do a USD issue,” Eisinger said, referring to the popular JPMorgan bond indexes.

Nations in Sub-Saharan Africa have been effectively locked out of international debt markets since the US Federal Reserve began raising interest rates aggressively in 2022 to fight inflation. The last country to borrow from the region was South Africa in April of that year.

©2024 Bloomberg L.P.