By Ben Edwards
African bond sales are poised for a buoyant end to the year.
Kenya followed Ethiopia Tuesday by announcing debt sale plans,
seeking to reopen two bonds it issued in June.
African borrowers have already raised almost $9 billion from
selling bonds this year, broadly keeping pace with last year's
record $11 billion total, according to data provider Dealogic.
Ethiopia earlier Tuesday said it is planning to meet investors
about a potential debut dollar bond sale, with a roadshow due to
start Wednesday and conclude Dec. 3, according to a person familiar
with the matter.
Kenya, meantime, is planning to increase the size of its debut
dollar bonds. Bankers working on the sale suggest the bonds should
price to yield in the area of 5.25% for those maturing in 2019 and
around 6.125% for the bonds maturing 2024. Those bonds are
currently trading at about 5% and 5.9% respectively, according to
Tradeweb.
The original sale in June raised Kenya $2 billion and was one of
the largest first-time issues from an African nation. Low U.S.
government bond yields are allowing African borrowers to raise
dollar debt at relatively cheap interest rates.
Ethiopia in May was handed credit ratings from Moody's Investors
Service, Standard & Poor's Corp. and Fitch Ratings in
preparation for a potential deal. The country is rated B1 by
Moody's and B by S&P and Fitch Ratings, four and five levels
below investment grade respectively. Moody's said its rating
reflects Ethiopia's strong economic growth over the past
decade.
Deutsche Bank and J.P. Morgan Chase & Co. are the banks
organizing the Ethiopia roadshow, according to the person familiar
with the matter.
Barclays, J.P. Morgan and Standard Chartered are managing the
Kenya sale.
Write to Ben Edwards at ben.edwards@wsj.com
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