Senegal has issued its debut 144A/RegS benchmark sovereign bond. The US$500m 10-year new issue carries a coupon of 8.75% and is rated B1 by Moodys and B+ by Standard & Poors.
This new issue for Senegal is only the fifth benchmark sovereign bond to come to market from sub-Saharan Africa, excluding South Africa. Standard Bank and Standard Chartered served as joint-book runners on this landmark transaction.
In conjunction with the new issue, Senegal offered note holders of the country’s existing US$200m RegS eurobond due in 2014 to exchange all outstanding notes for new 144A/RegS notes. In addition, Senegal sought the consent of 75% of the existing note holders to allow the country to amend the terms and retire all 2014 notes.
During the marketing process for the new bond, the Minister of Economy and Finance for Senegal, Abdoulaye Diop, led a delegation which included members of the Finance Ministry, the Treasury and the Banque Centrale des États de l’Afrique de l’Ouest (BCEAO), the regional central bank, on an extensive 8-day investor roadshow to New York, Boston, Los Angeles, Zurich, Geneva and London. As early preparation for this benchmark transaction, Standard Bank had also arranged a non-deal roadshow in the US for Senegal in April 2010, which served to develop key US investor interest in the country’s credit story.
“Exchanging the illiquid 2014 bond for an index eligible 144A/RegS benchmark dramatically re-positions Senegal in the international bond market,” said Florian von Hartig, global head of debt capital markets at Standard Bank. “The new bond provides Senegal with a liquid and broadly subscribed bond, which will serve as a beneficial pricing benchmark for Senegal’s future international capital markets requirements.”
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