By Tosin Sulaiman
JOHANNESBURG Oct 5 (Reuters) – Zambia is about to become an
African economic trend setter.
Its debut $750 million Eurobond, launched last month, was
oversubscribed a spectacular 15 times and analysts say it could
prove a catalyst for a wave of debt issuance from some of the
fastest growing economies in the world.
After a trickle of African Eurobonds over the past few years
and a backdrop of excess global liquidity when Zambia came to
the market, demand for the bond was expected to be feverish.
But even seasoned emerging market watchers were stunned by
the $11.9 billion order book for the 10-year bond, issued with a
5.625 percent yield that is now trading around 5.3 percent.
“What?” exclaimed one analyst on hearing the news. “Excuse
me while I get myself off the floor.”
While many emerging market deals this year have had high
subscription rates, it was a rare feat for a first time African
issuer with a B+ rating.
A debut $500 million bond from higher-rated Namibia last
October was oversubscribed five and a half times, while a
long-awaited issue of the same size from Nigeria, Africa’s
second biggest economy, generated around $1.5 billion worth of
orders.
Put into context, the size of the Zambia order book is
nearly double the gross domestic product of Rwanda.
Continued…
