Thursday, December 4, 2014

Ethiopia to complete debut dollar bond sale

Market Watch
Ethiopia is set to wrap up its debut dollar bond sale on Thursday, capping off a record year for frontier market debt issuance.

The 10-year bond will price to yield 6.625% and will raise $1 billion, according to one of the banks working on the deal. Investors said demand for the bond had reached around $2 billion.

The deal is another landmark sale for Africa, having seen a bumper $2 billion debut issue from Kenya in June—one of the largest ever first-time sales from the region.

“We’re running out of new names that can issue,” said Kevin Daly, a fund manager at Aberdeen Asset Management in London, adding that Ethiopia is the poorest country that has issued international bonds.

Ethiopia is rated B1 by Moody’s Investors Service and B by Standard & Poor’s Corp. and Fitch Ratings, four and five levels below investment grade, respectively. Deutsche Bank and J.P. Morgan are managing the bond sale.