Standard Bank leads on 2016 Eurobond issuance in Africa

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Standard Bank acted as joint lead manager and bookrunner on Banque Ouest Africaine de Développement’s (BOAD) inaugural Eurobond.

The US$750 million 5-year issuance is BOAD’s debut Eurobond and matches in size the largest ever US$ Eurobond issue by any African financial institution.

The bank has also worked on local currency bond issuances across Africa this year, including four from the Republic of Ghana (for Stanbic Bank Ghana), two issuances each from Bayport Financial Services in Ghana and Mozambique and the first Namibia dollar (“NAD”) denominated domestic bond issuance by the International Finance Corporation (IFC).

Megan McDonald, global head of debt primary markets at Standard Bank, said: “The success of these deals demonstrates that the market is open for Africa. It has been a volatile start to the year for markets and risk aversion to emerging markets, including Africa, has been high in recent month and spreads are now wider than in recent years. Despite this, we are still seeing interest from investors for quality credits from Africa.”

The BOAD Eurobond was issued on May 6 with a yield of 5.75 percent. The notes were rated Baa1 and BBB by Moody’s and Fitch, respectively. The order book included leading European (45 percent), US (44 percent) and Asian (9 percent) investors, with other countries making up 2 percent.

Fund managers and asset managers represented 80 percent of orders, with banks and private banks comprising 11 percent and insurance, pension and sovereign wealth funds making up the remaining 9 percent. The proceeds will be used for project financing and general corporate purposes.

The BOAD Eurobond is only the second Eurobond issuance in Africa in 2016 so far, following the US$1.25 billion Eurobond from South Africa in April. Standard Bank is the only bank to have worked on both transactions.

BOAD is the regional development bank of the current member states of the West African Economic and Monetary Union. Member countries are Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

Ghana Sovereign Bonds were issued under the Longer Dated Treasury Bond Programme. In an effort to improve price discovery, increase investor participation and improve transparency of the Treasury bond issuance process, the Ghanaian Ministry of Finance appointed Stanbic Bank Ghana as one of three Joint Bookrunners of longer dated Treasury Bonds (Treasury Bonds with a tenor of three years or longer) to be issued under a Note Programme.

To date, the issuances executed under the programme include the recent 5 year GHS811.1 million bond issued in June 2016. This followed the GHS746.4 million bond, which launched in March and the three-year GHS1.1 billion issuance in April. In November 2015, the debut issuance under the programme was a three-year bond for GHS516 million.

In terms of Bayport Financial Services Mozambique, which raised MZN201.5 million for a privately placed five-year floating rate note in April of this year, the institution completed a MZN113 million transaction, 5-year issuance.

Bayport Financial Services Ghana raised GHS50.1 million for three and five-year tenor funds in fixed and floating rate notes in May. This followed the GHS78.5 million three-year fixed and floating rate issuance in December 2015, which is the largest listed GHS denominated issue by a non-Government issuer.

Stanbic Bank Ghana acted as lead arranger for the Ghana issuances and Standard Bank Mozambique acted as Lead Arranger for the Mozambique private placement.

Meanwhile, the five-year IFC NAMIB bond was the first bond by a non-resident issuer in the Namibian capital markets, raising N$180 million for private sector development in the country. Standard Bank acted as joint lead manager and bookrunner.

Source: New Era