Ivory Coast Seeks 1.5 Billion Euros in Bonds for Buyback

ABIDJAN (Capital Markets in Africa) – Ivory Coast plans to sell as much as 1.5 billion euros ($1.6 billion) in bonds to refinance existing debt.

The West African nation is planning to issue two tranches of debt with a weighted average life of 11 to 15 years and 30 years, according to people familiar with the matter, who asked not to be identified because they’re not authorized to speak publicly about it. It plans to buy back as much as $1.5 billion in the dollar and euro-denominated notes maturing from 2024 to 2032, according to a filing to the Luxembourg Stock Exchange on Thursday.

The country mandated BNP Paribas, Citigroup Inc. and JPMorgan Chase & Co. as advisers, said the people. Proceeds of as much as 250 million euros may be used to finance the 2019 budget, said two of the people.

A government spokesman declined to comment when contacted by phone.

Performance
The world’s biggest cocoa producer is offering 30-year notes for a second straight year. Yields on the 6.625% securities it sold in 2018 jumped to a high of 8.1% in January before receding to below the coupon-rate last month. It returned 19% to investors so far this year, making it the best-performing euro-denominated bonds in emerging markets, according to Bloomberg Barclays indexes.

The sale by Ivory Coast follows deals from Egypt, Tunisia and Benin which collectively raised 3.2 billion euros of notes in the shared currency.

“We have seen a trend in more issuers going for euros as it reduces the funding yield,” said Anders Faergemann, a senior portfolio manager at Pinebridge Investments Europe Ltd. in London. “For Ivory Coast, it makes even more sense as the currency is pegged to the euro,” he said, referring to the CFA franc.

In a separate auction Thursday on West Africa’s regional market, Ivory Coast sold 38 billion francs ($63 million) of five-year debt at 6.61% and 169.8 billion francs of 3-year securities at 6.7%, according to debt agency UMOA-Titres.

Source: Bloomberg Business News