Ivory Coast to sell first pandemic-era Eurobond in sub-Saharan Africa

ABIDJAN/LONDON, Nov 23 (Reuters) – Ivory Coast is looking to sell sub-Saharan Africa’s first pandemic-era Eurobond as developing issuers increasingly tap into global capital markets to benefit from this year’s plunge in interest rates in the COVID-19 pandemic.

The west African country’s finance ministry said in a statement on Monday it planned to issue new bonds as well as tender $825 million of outstanding ones and has mandated BNP Paribas, JPMorgan Securities and Standard Chartered Bank for the transaction. A source at the ministry said the discussions on the amount had not yet been finalized.

Sub-Saharan Africa has seen no debt sales since Ghana and Gabon sold debt earlier in the year, before the coronavirus pandemic ripped through global markets, while Zambia became the region’s first sovereign default earlier this month.

More vulnerable issuers in the region, such as Angola or Mozambique, would struggle to tap markets, still facing elevated borrowing costs.

However, higher rated and more established developing countries have been busy issuing debt, with China selling its first negative-yielding government bond last week while Mexico, Russia and Turkey have also come to market.

The currency of Ivory Coast, the world’s biggest cocoa producer, is pegged to the euro and part of its reserves are held by the French Treasury. The country has ramped up debt sales in the common currency in recent years.

Its outstanding euro-denominated sovereign bonds have seen yields drop in recent months. The 2030 issue currently trades at 103.667 cents yielding 4.7%, not far above its pre-COVID-19 low of 4.4%.

In June, Ivory Coast asked for debt relief under the Group of 20 major economies Debt Service Suspension Initiative (DSSI).

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