Bloomberg News

HSBC, Rabobank Unit Bid to Be Zambian Eurobond Bookmakers

February 15, 2012

(Updates with comment from Silk Invest in fourth paragraph.)

Feb. 14 (Bloomberg) -- HSBC Holdings Plc and Rabobank International’s Zambia National Commercial Bank are among bidders to become bookmakers for Zambia’s debut Eurobond of as much as $700 million, Treasury Secretary Fredson Yamba said.

Africa’s biggest copper producer will meet investors to gauge interest for its first Eurobond within eight weeks, Yamba said by phone today from Lusaka, the capital. The government is looking for two bookmakers and a legal adviser, he said. Rabobank owns 45 percent of Zanaco, according to its website.

Zambia will sell a 10-year Eurobond in 2012 to raise money for infrastructure and other construction projects, Finance Minister Alexander Chikwanda said Nov. 11. The bond was delayed from last year as the European debt crisis curbed demand for debt. Standard & Poor’s rates the nation’s debt at B+, four levels below investment grade.

“It’s one of the more stable countries on the continent,” John Bates, head of fixed income at Silk Invest Ltd., said in a phone interview from London today. “It’s one of the biggest foreign direct investment recipients mainly because of the mining sector.”

Zambia will join other sub-Saharan African nations such as Nigeria, Ghana, Gabon, Senegal, Seychelles and Namibia, which have sold international debt.

The nation’s Eurobond may yield 6.25 percent to 6.5 percent at its issue, Bates said.

“The rarity value of a Zambian issuance will be very interesting to investors,” he said.

Nigeria Yield

Nigeria, Africa’s biggest oil producer which is also rated B+ by S&P, in January 2011 sold its first dollar-denominated debt. The yield on the bonds due 2021 has fallen 93 basis points since the issue to 5.86 percent, according to data compiled by Bloomberg.

Angola, Africa’s second-largest oil producer, and Rwanda also plan to raise capital in the global markets. Kenya’s government canceled plans to sell a Eurobond this fiscal year and may instead raise $600 million from international banks, Joseph Kinyua, permanent secretary in the Finance Ministry, said Dec. 13.

The economic slowdown in Europe hasn’t deterred Zambia’s plans, Yamba said.

“I think the European countries are looking for a stable destination to economically partner with and Zambia right now presents that opportunity,” he said.

A number of South African and Zambian lenders have also expressed interest in book making for the country following an advertisement in newspapers local and abroad, Yamba said.

The kwacha strengthened for first time in seven days, adding 0.4 percent to 5,265 per dollar by 2:30 p.m. in Lusaka.

--Editors: Ana Monteiro, Antony Sguazzin

To contact the reporters on this story: Anthony Mukwita in Lusaka at; Chris Kay in Abuja at

To contact the editors responsible for this story: Antony Sguazzin at; Gavin Serkin at

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