Senegal to issue Eurobond in April, Finance Minister Says

ABIDJAN (Capital Markets in Africa) – Senegal will issue a Eurobond this month in order to finance a series of infrastructure and power production projects that it hopes will push economic growth above 7 percent from next year, Finance Minister Amadou Ba said on Friday.

Ba declined to give the amount of the issuance or its maturity. The West African nation is rated B1 by Moody’s and B+ by Standard & Poor’s.

“I think that the moment has arrived to return to the market,” he told reporters on the sidelines of a meeting of regional finance ministers in Ivory Coast. “We’ll do it in the coming weeks. It will be a Eurobond.”

Senegal, a member of the eight-nation CFA currency bloc which maintains a fixed rate against the euro, issued its first $200 million 5-year Eurobond in December 2009 at a yield of 9.25 percent. It followed that with a $500 million 10-year issue in 2011 bearing a coupon of 8.75 percent.

More recently it returned to the market in 2014 with a $500 million, 10-year Eurobond with a coupon of 6.25 percent, which was several times oversubscribed.

“Senegal has launched big projects, whether it’s the regional train, motorways but also electricity projects, construction of a university, health and agriculture,” Ba said.

“We want to be self-sufficient in rice in 2017 and that requires a lot of investment in agricultural irrigation,” he added.

French industrial firm Alstom announced in December plans to sell 15 new regional trains to Senegal for use between the capital Dakar and a new international airport under construction around 50 km (30 miles) outside the city.

Construction of the trains is due to begin this year.

Ba said that Senegal is revising the basis upon which it calculates its gross domestic product, which he said is outdated, and expects the changes to show the economy is at least 30 percent larger than currently believed.

Source: Reuters Africa News