How to issue African debt

Author: | Published: 16 May 2013

  • In the last year, there has been a material sea change in Africa’s debt capital markets, in terms of deal appetite and product diversity;
  • Negotiations on documentation can be a source of considerable tension in African sovereign bond deals;
  • It’s vital to have international counsel advising the issuing government agency from the outset, to explain what the international market standards are and why the banks require these to be met;
  • Yield-hungry investors are increasingly looking to tap Africa’s local currency bond market. But these provide much sharper jurisdictional sovereign risk than international bonds;
  • Banks are now considering African securitisations. But local lawyers warn the continent may not yet be sophisticated enough for such a market.

Africa’s debt capital markets offer both high yields and safety...