Zambia Selects Banks For USD Denominated Bond Emission

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The Ministry of Finance of Zambia has selected Barclays and Deutsche Bank to undertake its USD-denominated bond emission for this year, informed Reuters last week.

The banks, that have started a series of meetings with fixed income investors in the US and Europe on 16th July, 2015, will arrange a typical 144A/Reg S bond emission developed by the Securities and Exchange Commission (SEC) for foreign issuers in the US.

According to the Bank of Zambia’s website, the current Government Bond rates are between the 20.4% and 25.3% for debt instruments of one and five years of maturity respectively.

However, since the new emission will be in USD, exchange rates might vary due to market conditions.

The Zambian Government has been working with Barclays and Deutsche Bank since the year 2012 to arrange Eurobonds emissions. That year, Zambia debuted with a EUR 500 million bond emission where both banks were the book runners.

More recently, in 2014, booth banks again book ran Zambia’s second Eurobonds emission to fund the Government’s deficit of that year valued in USD 1 billion.

Zambia is rated by S&P, Moodys and Fitch Ratings with a B+, B1 and B rank, which are considered highly speculative in capital markets.