Bloomberg News

Moody’s Says Six African Nations to Tap Bond Market in Few Years

October 07, 2013

At least six sub-Saharan African countries will issue debut international bonds in coming years as record demand for the continent’s debt will be sustained by strong economic growth, according to Moody’s Investors Service.

Angola, Cameroon, Kenya, Tanzania, Uganda and Mozambique are planning to sell their first sovereign notes, most of which will be more than $500 million, Moody’s analysts including Dubai-based Aurelien Mali wrote in a report dated today. Senegal, which first issued debt in 2009, plans to again tap international markets by the end of this year, they said.

“The region overall has shown considerable resilience to financial shocks during the global financial crisis,” the analysts said. “We expect that investors’ interest in the region will be sustained given the strong macroeconomic growth outlook for Africa.”

African sovereigns from Egypt to South Africa have sold a record $8 billion this year with demand outstripping supply of foreign-currency issuance by an average six times since 2011, according to Moody’s. Even so, only 14 out of 54 countries on the continent have sold international debt and the region’s domestic capital markets are still at a nascent stage of development, it said.

Moody’s expects economic growth on the continent to average between 5 percent and 6 percent “over the coming years,” putting the region among the best global performers, the ratings company said.

Rwanda sold its debut $400 million of Eurobonds in April, while Nigeria and Ghana both issue their second batch of international notes in July.

First Sale

Kenya, East Africa’s largest economy, will stick to its plan to seek as much as $2 billion from its first Eurobond sale by December, despite a deadly attack on a Nairobi shopping mall by Islamist militants last month.

Moody’s said in a separate report on Sept. 26 that the attack in Nairobi may curb government revenue, mostly from tourism, and is “credit negative” on the B1 rated economy.

Average yields on African debt have risen 156 basis points this year to 5.82 percent, according to JPMorgan Chase & Co.

Uncertainty over when the U.S. Federal Reserve may scale back its $85 billion in monthly bond purchases will probably “continue to affect the cost of those bond issuances as benchmark interest rates are trending upwards, thereby reducing the cost advantage of international issuance,” said Moody’s.

To contact the reporter on this story: Chris Kay in Abuja at

To contact the editor responsible for this story: Vernon Wessels at

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