Benin Said to Consider First Foray Into Foreign Bond Markets

BENIN (Capital Markets in Africa) – Bond investors may be about to welcome a new kid on the emerging-market block: Benin.

The West African country — gross domestic product about $10 billion — is readying a series of meetings with would-be takers for a first ever sale of Eurobonds, according to a person familiar with the matter. Citigroup Inc., Natixis SA and Societe Generale SA have been hired to organize the meetings, which will take place in Europe and the U.S. from Tuesday, the person said, asking not to be identified because the matter isn’t public.

Benin would be the latest in a list of nations tapping international capital markets for the first time as the dovish turn by some of the world’s leading central banks spurs appetite for higher-yielding, higher-risk holdings. Emerging-market borrowers have raised about $385 billion in foreign bonds so far in 2019, a record on a year-to-date basis.

“Emerging markets sentiment has been much improved in 2019 and the conditions for a deal are better than last year,” said Gregory Smith, a fixed-income analyst at Renaissance Capital in London. “Uzbekistan did well with their recent debut issuance, suggesting if Benin can provide the investors with a good pitch there will be interest.”

Benin is rated B+ by S&P Global Ratings, four levels below investment gradebut a step higher than Nigeria and Ghana, the region’s biggest economies. Its currency, the CFA-Franc, is also used by six other French-speaking nations in West Africa and Guinea-Bissau and is pegged to the euro at 655.957.

The sale will be benchmark-sized, denominated in euros and with a maximum maturity of eight years, the person said.

Source: Bloomberg Business News