Senegal raises $750m in fourth sub-Saharan Eurobond of 2024
TLDR
- Senegal raises $750 million in debt at a 7.75% coupon rate, managed by JPMorgan Chase & Co.
- Analysts view this bond sale as a positive indicator of growing investor confidence in Senegal's new government.
- Senegal's 7.75% interest rate is lower than Benin and Kenya but higher than Côte d'Ivoire's recent bond issuance rate.
Senegal has become the fourth sub-Saharan African nation to enter the Eurobond market this year, raising $750 million in debt maturing in 2031 at a coupon rate of 7.75%. JPMorgan Chase & Co. managed the sale.
The emerging oil and gas producer sold $500 million on Monday, which was increased by $250 million on Tuesday. Given previous pre-election disruptions, analysts interpret this bond sale as a sign of growing investor confidence in Senegal's new government.
Senegal's interest rate of 7.75% is lower than recent Eurobond offerings by Benin (7.9%) and Kenya (10.37%), but higher than Ivory Coast's 6.61% rate for its $2.6 billion issuance in January.
Key Takeaways
Senegal is poised to become a significant player in sub-Saharan Africa's oil and gas sector this year, following major discoveries over the past decade. The IMF projects the country's growth to reach 8.3% in 2024. President Diomaye Faye, elected on a reform platform, aims to revamp public finances by reducing debt burdens and renegotiating resource contracts from previous administrations. The new government plans to leverage its natural resources to achieve these financial reforms and drive economic growth. Meanwhile, African nations are diving into the Eurobond market again after a hiatus of about two years, seeking to put their houses in order amid signs of growing confidence in their economies. Kenya plans another early buyback of its Eurobonds.
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