A stellar start of the year for African Sovereign Issuance
Nigeria listed $2.5bn Eurobond on Main Market attracting orders in excess of $11bn
Egypt listed $4bn triple tranche bonds on the Main Market
Kenya listed $2bn dual tranche bonds attracting orders in excess of $14bn
The first three months of 2018 have seen a number of new Fixed Income listings on the London Stock Exchange originating from Africa. Nigeria, Egypt and Kenya all issued Sovereign debt on London’s Main Market raising a combined $8.5bn.
London Stock Exchange Group (LSEG) welcomed Egypt’s $4 billion triple tranche bonds to the Main Market. The bonds, listed solely in London, are also available to trade on LSEG’s MTS BondVision, the Group’s multi-dealer-to-client trading platform for government bonds.
The listing raised $1.25 billion in five year notes at a yield of 5.577 percent, $1.25 billion in ten year notes at a yield of 6.588 percent, and $1.5 billion in 30 year notes at a 7.903 percent yield. Despite market volatility, the order book peaked at $12.5 billion. Egypt will use the proceeds from each tranche of notes to finance the country’s fiscal debit for each relevant fiscal year. The listing comes less than a year after Egypt raised $7 billion on London Stock Exchange in the first half of 2017.
Amr-Al Garhy, Finance Minister, Egypt:
"Egypt is progressing steadily and firmly with its ambitious economic reform program. Regaining investors confidence and improving Egypt's economic prospects have been key achievements for us”
“Partnering with LSEG proved to be an important catalyst for Egypt both in terms of outreach to international investors and taping one of the deepest and liquid financing venues in the world. We are keen to further enhance and diversify our successful engagement in the coming period for the mutual benefits of both sides."
London Stock Exchange welcomed Nigeria’s $2.5 billion dual tranche Eurobond to start trading in London. The 12 year government bond pays a coupon of 7.143 percent and the 20 year bond pays 7.696 percent. The offer was over 4x times oversubscribed, with the order book closing at approximately $11.5 billion. The listing secured high quality investor support from across the US and Europe and will support Nigeria in financing its long term infrastructure projects.
The Federal Government intends to use the proceeds of the Notes for the refinancing of domestic debt. The Notes represent Nigeria’s sixth Eurobond offering, following previous successful issuances in London in 2011, 2013 and 2017.
Mrs. Kemi Adeosun, Minister of Finance:
“This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.”
Last week London Stock Exchange welcomed Kenya’s $2 billion dual tranche bonds to the Main Market. The ten year tranche pays a coupon of 7.25 percent, whilst the 30 year tranche pays 8.25 percent. The bond listed on London Stock Exchange’s Main Market, was 7x oversubscribed and attracted orders worth $14 billion.
Kenya High Commission:
“The fact that we got $14billion in investor appetite reflected the continued support the country receives. We now have a dollar yield curve stretching out to 30 years, making Kenya one of only a handful of governments in Africa to achieve this."
“The funds will be applied towards the government’s development initiatives and liability management. We will continue to invest in the infrastructure and capacity to roll out these programmes.”
“Having the issue listed in the London Stock Exchange further supports the liquidity for the issue. We have seen significant investment to our growing economy from global corporations and investors and this listing provides yet a further avenue for investors to participate in our story.”
These recent sovereign bond listings build on a series of high profile sovereign and corporate bond issuances from Africa on London Stock Exchange. With over $28.6bn raised and 31 African bonds currently listed, London is a natural partner for African issuers. This reflects the City’s ability to provide a deep, liquid and complementary channel of finance for the development of African Capital Markets.