Friday, December 20, 2013

Ethiopia hires French firm Lazard to secure credit rating-officials

Reuters
Dec 19 (Reuters) - Ethiopia has hired French investment bank and asset manager Lazard Ltd in a bid to select rating companies and secure its first credit rating, officials said on Thursday, which would pave the way for issuing a debut Eurobond.

In an October interview, Prime Minister Hailemariam Desalegn told Reuters that Addis Ababa planned "not only a Eurobond but other bonds as well" once it secured a rating.

Ethiopia has ruled out liberalizing its state-owned banks or telecoms sector to foreigners saying the revenues generated for the state each year were spent on vital infrastructure projects.

But a Eurobond issue would give investors, who have snapped up sub-Saharan sovereign bonds, another route into Africa's second most populous nation, which is keen to shift its largely agrarian economy towards textiles and other manufacturing.


"We chose a French company. The
second phase will be to initiate a rating for the country," Sufian Ahmed, Ethiopia's minister for finance and economic development, told a business forum attended by a delegation of 30 French firms.

Another official at the ministry told Reuters the government had hired Lazard Ltd, and that Addis Ababa expected the whole process to be finalised in a "few months".

The French delegation included officials from French banks BNP Paribas and Societe Generale.

Propelled by huge public spending on infrastructure and an expansion in services and agriculture, Ethiopia's economic output is set to grow 7.5 percent in each of the next two fiscal years, the IMF says.

The Washington-based body, however, has warned Ethiopia that its economy has reached a crossroads and, to prevent growth rates from falling, needs to be restructured to encourage more private sector investment. (Reporting by Aaron Maasho; editing by George Obulutsa and Rosalind Russell)
http://www.reuters.com/