Skip to main content

Strong demand for Ivory Coast bond

London (UK) – 17 July 2014 – FT - 

Ivory Coast has attracted almost $5bn of orders in its return to bond markets just three years after default, in the latest sign of increased investor demand for frontier market debt.
The 10-year, $750m bond, which is expected to price at a yield of 5.625 per cent, was more than six times subscribed – attracting an overall book of $4.75bn.

The yield on the bond is set to be lower than that of Kenya’s record-breaking $2bn bond in June.

African debt markets have grown rapidly in the past two years as governments and companies move to take advantage of low global interest rates and strong investor appetite for higher yields.

“Investors are increasingly keen to invest in frontier markets, but when it comes to Africa, they are also increasingly eager to address each country on its own individual merits rather than seeing the continent as an undifferentiated whole,” said Nicholas Samara, debt capital markets banker at Citi, one of the banks involved in the sale.

“In the case of the Ivory Coast, the country has been reaping peace dividends since its return to political stability.”

Ivory Coast suspended payments on a $2.3bn bond in 2011 following a period of intense political unrest. The bond, issued in 2010, was itself part of a restructuring of securities originally issued in 1998, which the country had defaulted on.

However, the country – the world’s leading cocoa producer – has since returned to a period of political stability under president Alassane Ouattara.

The International Monetary Fund forecasts that the Ivory Coast’s economy will grow 8.2 per cent in 2014 – the fourth-highest predicted growth in Africa.

“If you want to turn a country into an emerging market by 2020, you need to have a high rate of growth, and that needs huge investment,” said Daniel Kablan Duncan, prime minister and finance minister of the Ivory Coast.

He added that the proceeds of the bond would be mainly used to finance public investment, especially in fields such as healthcare and education.

Other “frontier markets” with a history of default have recently announced a return to the bond market. Ecuador, which defaulted five years ago, issued a $2bn bond last month.

“I think that you have seen people become more comfortable with frontiers,” said Stuart Culverhouse, head of research at frontier markets specialist Exotix. “These markets have benefited from people thinking more mainstream emerging markets are fragile.”

Citi, BNP Paribas and Deutsche Bank worked on the deal.


Popular posts from this blog

PFM Act to guide local government authority borrowing

By: Fred Yaw Sarpong
The bill, Public Financial Management (PFM) Act 921 which has been passed into law by Parliament is to guide public institutions especially the local government authority borrowing. The law was pass on 3rdAugust, 2016
According to the law, local government authority, a public corporation or state-owned enterprise is liable for the debt and other obligations without recourse to Government, unless otherwise explicitly guaranteed by Government in accordance with this Act.
Madam Eva Esselba Mends, the Chief Economic Officer and Group Head of PFM at the Ministry of Finance told the Daily Express that the law involves a lot but it also give instruction to how state institutions can borrow especially with the  local government authority.
She mentioned that there is no specific law in place that gives direction as to what local authority can do when it comes to borrowing by the authority. Other public corporations sometimes borrow with huge amount for their operation but loca…

Vodafone fined a record £4.6 million for IT blunder

A top-up error left pay-as-you-go customers out of pocket and complaints were mishandled
Vodafone has been fined a record £4.6 million by the telecoms watchdog forleaving thousands of customers out of pocket in a disastrous IT blunder.
Ofcom found that the operator mishandled complaints and failed to pay into the accounts of more than 10,000 pay-as-you-go customers when they topped up their credit.
The top-up error, which cost customers £150,000 over 17 months in 2014 and 2015, stemmed from the moving of 28.5 million accounts to a new billing system.Errors in billing data and price plans caused so much protest that it made Vodafone the most complained-about mobile network in Britain.The technical issues were resolved by April 2015 and all accounts are now on the new system, Vodafone said.
Lindsey Fussell, Ofcom’s consumer group director, said:“Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies.”
The company says that it has ref…

Enterprise Life inaugurates social centre for Kumasi SOS village

By: Fred Yaw Sarpong
Enterprise Life and Sanlam South Africa together with SOS Children’s Villages Ghana have jointly inaugurated a newly constructed social centre at the SOS Children’s Village, Kumasi in the Ashanti region.
The project, valued at GHc485,000.00 forms part of Enterprise Life and Sanlam-South Africa’s corporate social responsibility (CSR) to promote quality education and health for vulnerable children in Ghana.
The newly established social centre provides a suitable multi-purpose facility with a spacious auditorium among others to host different social activities related to child growth and development and will cater for both SOS children and students of the Hermann Gmeiner School.
The centre also offers the beneficiaries the opportunity to freely socialize and participate actively in educational oriented activities such as school concerts, art exhibitions and workshops.
The Executive Director of Enterprise Life, Mrs. Jacqueline Benyi expressed satisfaction that her outf…