Senegal is planning to sell a second Eurobond worth $500 million, according to the International Monetary Fund, joining Ghana, Nigeria and Rwanda as African nations tapping foreign debt markets this year.
The country’s authorities “are well advanced in the process of hiring financial and legal advisers and expect to issue the new bond early this fall,” the IMF said in a document published on its website yesterday that partly cites a June 4 staff report. The duration will match Senegal’s sale in 2011 of 10-year notes.
Sub-Saharan African nations, where growth is projected by the IMF to be the second-fastest in the world this year after emerging Asia, are taking advantage of investor interest in the frontier markets after yields retreated to record lows. Borrowing costs on Senegal’s first debt of $500 million, sold in May 2011, rose 80 basis points, or 0.8 percentage point, to 8.688 percent by 6:21 p.m. yesterday in Dakar.
“Current markets conditions seem indeed favorable,” the IMF said, citing yields below 6 percent where the rate was in late May. African borrowing costs jumped last week after Federal Reserve Chairman Ben S. Bernanke said the central bank may reduce monetary stimulus that pushed cheap money into U.S. markets, some of which was spent on assets from emerging nations.
Ghana and Nigeria are planning second international bond sales, worth $1 billion each, this year and Rwanda sold a debut $400 million Eurobond in April. Kenya is planning its first sale by September to fund infrastructure projects.
Senegal began selling 50 billion CFA francs ($99 million) of 10-year bonds on June 21 to fund roads, bridges and energy projects, Finance Minister Amadou Kane told reporters in Dakar. The offer is open until July 22, according to a website promoting the debt.
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