IFC sells ZMW 150mn 4-year Zambezi bond amid huge interest

By bne IntelliNews September 20, 2013

The International Finance Corporation (IFC), the World Bank Group’s private sector investment arm, sold on Thursday (Sep 20) ZMW 150mn (EUR 21.3mn) worth of 4-year Zambian kwacha-denominated bond on the local market, aiming to support domestic capital markets and increase access to local-currency finance in Zambia. The issue, dubbed “Zambezi” bond, is IFC’s first kwacha-denominated bond and the first placement by a nonresident issuer in Zambia’s domestic capital markets, IFC said in a statement. The bond attracted huge investor interest with the order book exceeding ZMW 700mn, equivalent to an oversubscription of 4.8 times. The bond was issued at par and priced with an annual yield of 15%.

Jingdong Hua, IFC Vice President and Treasurer noted that the Zambezi bond supports IFC’s efforts to deepen domestic capital markets in Africa by creating access to long-term, local-currency finance for the private sector, which is the key engine of job creation in emerging markets. The Zambezi bond was the first issuance under the IFC Pan-Africa Domestic Medium Term Note Programme, which focuses on Botswana, Ghana, Kenya, Namibia, Rwanda, South Africa, Uganda, and Zambia. IFC bonds are rated triple-A by Moody’s and Standard & Poor’s.

Under its Zambian local-currency bond program, IFC can issue bonds of up to ZMW 2.5bn. Standard Bank and Stockbrokers Zambia are co-lead arrangers for the program.

In February, the IFC sold NGN 12bn (EUR 55mn) worth of 5-year Nigerian naira-denominated bond on the local market, raising the initially planned size of the issue by 50% due to strong demand. The issue, dubbed Naija bond, attracted orders worth NGN 20bn. IFC then said it would issue another one or two African local-currency bonds this year, aiming to promote local-currency lending.

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