African Trade Bank Plans Eurobond Sales to Build on May Sale

LAGOS (Capital Markets in Africa) – Trade & Development Bank, a trade financier with 22 African countries as members, plans to return to the market sooner than planned to raise $100 million as borrowing costs become more favorable.

“There’s a strong possibility that we would be tapping by the end of 2019,” Chief Executive Officer Admassu Tadesse said in an interview in Port-Louis. “It could be $100 million dollar – we would see that as a more plausible scenario given the requirements of our treasury.”

The bank, which has its main offices in Burundi and Mauritius, raised $500 million in May with a Eurobond sale that was more than three times oversubscribed, backed by improved credit ratings and pricing. The bank previously sold Eurobonds in 2017.

Trade & Development Bank is rated Baa3 by Moody’s Investors Service, and BB+ by Fitch Ratings.

The sentiment among investors is “risk on” at the moment, Tadesse said. “The Euro bond tightened very nicely after we did the initial pricing. This one, we launched it at 5% with a coupon of 4.875%. The previous one was 5.5% fixed. If you go back a couple of years, it was 6.3%,” Tadesse an interview on the side lines of an event marking the bond’s dual listing on the Stock Exchange of Mauritius.

The lender, which counts the People’s Bank of China and the African Development Bank as shareholders, has seen total loans grow to almost $5 billion, while its balance sheet is about $6 billion, according to Tadesse. Earnings rose 16% to $129 million last year.

New target markets include Kenya, Rwanda, Uganda, Tanzania, Madagascar and Egypt, he said.

Source: Bloomberg Business News