Benin Republic to raise $750m in first ever dollar bond issuance
TLDR
- Benin is planning to issue its first-ever dollar-denominated bond, targeting to raise $750 million.
- Finance Minister Romuald Wadagni is engaging in meetings with investors and organizing a roadshow trip to London and New York.
- The bond is expected to have a final maturity of 14 years and aims to diversify Benin's sources of funding for developmental initiatives.
Benin is set to issue its first-ever dollar-denominated bond sale with a target of raising approximately $750 million this month, as reported by three sources cited by Reuters.
Finance Minister Romuald Wadagni, leading Benin policymakers, is engaging in both in-person and virtual meetings with investors. The government is organizing a roadshow trip to London and New York to garner interest in the country's inaugural U.S. dollar issuance.
Sources have indicated that the government has communicated its intention to launch the bond as early as next week. The bond is expected to be an amortizing note with a final maturity of 14 years. This move reflects Benin's strategy to tap into international capital markets and diversify its sources of funding for developmental initiatives.
Key Takeaways
Historically, Benin, a West African nation using the West African CFA franc pegged to the euro, has exclusively issued international bonds denominated in euros. The move to issue bonds in dollars follows Ivory Coast's $2.6 billion euro-denominated international bond sale in January. Before Ivory Coast's debt sale, sub-Saharan Africa had experienced a nearly two-year hiatus in international bond issuances. This lull was attributed to various factors, including the impact of COVID-19, the consequences of Russia's war in Ukraine, and the surge in global interest rates. The latter made foreign currency debt unaffordable for many nations from early 2022 onwards. Benin's decision to explore the dollar-denominated bond market reflects a strategic response to prevailing market conditions and a concerted effort to access diverse sources of international capital.
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