Benin eyes more opportunities after bumper dollar bond sale

London — Benin could return to international capital markets more frequently after the success of the country’s inaugural sovereign dollar bond, a senior government official said.

The West African nation became the second in the region to launch a dollar bond after a near-two year drought of international debt sales from Sub-Saharan Africa with many nations hit hard by Covid-19, the fallout from Russia’s war in Ukraine and rising global interest rates.

Benin saw order books bulge to more than $5bn before it sold $750m of the amortising bond with a 14-year final maturity and a coupon of 7.96%, the government official said, declining to be named.

“This was a very big book ... and it was a very successful operation,” the government official said. “If the opportunity arises, then it will be our goal to issue again — we will be opportunistic.”

Ahead of the bond sale, Benin finance minister Romuald Wadagni held meetings with investors, and led a road show in London and New York.

Benin is one of the countries using the West African CFA Franc that is pegged to the euro, and has until now only issued international bonds denominated in the euro currency. Its bond sale comes on the heels of Ivory Coast — another issuer favouring euro-denominated international bond sales — which successfully raised $2.6bn in January.

The government was also assessing issuing more sustainable bonds, the official added.

Benin has been a front-runner in issuing fixed income instruments aligned with the UN’s Sustainable Development Goals (SDGs), which earmark proceeds for projects with positive environmental and social returns. It launched a €500m SDG bond in 2021.

“We will look at all possible instruments and, if we see an opportunity arise, we will try and make use of it,” the official said.

Reuters