Ivory Coast raises $2.6bn in record-setting oversubscribed Eurobond

BREAKING NEWSJanuary 27, 2024 at 9:06 AM UTC

TLDR

Ivory Coast successfully raised $2.6 billion through two Eurobonds with maturities of nine and 13 years.
The bond issuance attracted over 400 investors, generating an order book exceeding $8 billion, setting a new record in West Africa.
The newly issued bonds have interest rates of 6.30% and 6.85%, with a currency hedge operation resulting in an average interest rate of 6.61%.

Ivory Coast has made a successful return to the international Eurobonds market, raising $2.6 billion through two bonds with maturities of nine and 13 years. This marks the country's first foray into the Eurobonds market in two years, as confirmed by the government in a statement on Tuesday.

The bond issuance garnered significant interest, attracting over 400 investors and generating an order book that surpassed $8 billion. This achievement sets a new record for the highest order level ever recorded by a sovereign in West Africa. The budget and finance ministry described the transaction as historically significant, highlighting widespread participation from major global investors, both existing holders of Ivorian bonds and new benchmark investors.

The two newly issued bonds come with respective interest rates of 6.30% and 6.85% upon execution. Additionally, a Dollar-Euro currency hedge operation, covering the entire issued amount, was conducted simultaneously with the bond issuance, resulting in an average interest rate of 6.61%, according to the government statement.

Key Takeaways

The economic challenges faced by many Sub-Saharan African economies, exacerbated by the impacts of COVID-19, the repercussions of Russia's war in Ukraine, and the surge in global interest rates, have made foreign currency debt exceptionally costly. This financial strain has effectively restricted these economies' access to international capital markets since early 2022. Ivory Coast's finance ministry, acknowledging these difficulties, announced that the $2.6 billion raised through the recent Eurobonds issuance will be predominantly allocated to repurchasing and refinancing the country's existing Eurobonds, along with settling international bank loans. By utilizing the funds to address existing debt obligations, Ivory Coast aims to navigate the challenging economic landscape and manage the financial constraints imposed by unfavorable external conditions. This strategic use of the raised capital reflects a concerted effort to address the economic fallout and ensure sustainable financial management for the country. We wrote about the country's resilience in this blog.

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