News and developments on African capital markets, includes: African securities, African stock exchanges/stock markets, African equities, African bonds, African private equity/venture capital, and African social impact investment
African countries (apart from South Africa) are set to place $7 billion of debt this year, buoyed by low interest rates and a huge global appetite. It is more than the previous 5 years combined and African capital markets are feeling the boom.
The first Eurobond issued by Rwanda, due to mature in May 2023, raised $400 million at 6.875% and the money will go to start generating hydroelectricity by December with further expansion in June 2014 and also pay for airline expansion and a convention centre.
Zambia went to the global market yesterday (13 September) with its first eurobond, a USD750 million 10-year bond priced at a 5.625%. It will be used to fund its budget and invest in infrastructure and the issue highlights “great appetite” for African credit.
2012 could be an active year for African bonds and particularly eurobonds, judging by the 5.5 times oversubscription for the Namibia’s debut $500 million, 10-year Eurobond. However, timing and terms of issues will be crucial in the turbulent markets.
The Namibian government issued a debut US$500 million, 10-year Eurobond on 27 October and got a price of 5.75%, taking advantage of a lull in the capital markets turmoil.
Kenyan private equity firm TransCentury is to list through introduction at the Nairobi Stock Exchange on 14 July at a price of KES50 (USD0.58) a share. The firm began as an investment club and is valued at KES13.35 billion ($148.7 million).
Egypt is chasing its short-term domestic market to fund ballooning Government deficits, but seems to be preparing for a new Eurobond issue to replace $1 bn in 8.75% Eurobonds maturing in July. US President Barack Obama’s May guarantee on $1 billion of Egyptian debt could cut the country’s borrowing costs by $100 mn.
The London Stock Exchange has long been a global centre for capital, particularly where African investments are concerned. It is also the world centre for Eurobonds and several leading African equities are traded in London.
Nigeria’s Guaranty Trust Bank is coming to the market with a $500 million Eurobond, which may roll out into a $2 billion offering. The bank is listed on the Nigerian and London Stock Exchanges.
Senegal has successfully re-priced its yield curve by issuing a more liquid 10-year $500 million Eurobond carrying a coupon of 8.75%. The bond was priced at 97.57 when it was bid on 6 May, the equivalent of a yield of 9.125%.